(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2008 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware
(State or other Jurisdiction of Incorporation or Organization) |
54-1194634
(IRS Employer Identification No.) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, $0.01 par value | New York Stock Exchange |
Delaware
(State or other Jurisdiction of Incorporation or Organization) |
54-0218143
(IRS Employer Identification No.) |
US Airways Group, Inc.
|
Yes þ | No o | ||||||
US Airways, Inc.
|
Yes o | No þ |
US Airways Group, Inc.
|
Yes o | No þ | ||||||
US Airways, Inc.
|
Yes o | No þ |
US Airways Group, Inc.
|
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | ||||||||||
US Airways, Inc.
|
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
US Airways Group, Inc.
|
Yes o | No þ | ||||||
US Airways, Inc.
|
Yes o | No þ |
US Airways Group, Inc.
|
Yes þ | No o | ||||||
US Airways, Inc.
|
Yes þ | No o |
2
| the impact of future significant operating losses; | |
| economic conditions; | |
| changes in prevailing interest rates, a reduction in the availability of financing and increased costs of financing; | |
| our high level of fixed obligations and our ability to obtain and maintain financing for operations and other purposes and operate pursuant to the terms of our financing facilities (particularly the financial covenants); | |
| our ability to maintain adequate liquidity; | |
| labor costs and relations with unionized employees generally and the impact and outcome of labor negotiations, including our ability to complete the integration of the labor groups of US Airways Group and America West Holdings; | |
| our reliance on vendors and service providers and our ability to obtain and maintain commercially reasonable terms with those vendors and service providers; | |
| the impact of fuel price volatility, significant disruptions in the supply of aircraft fuel and further significant increases in fuel prices; | |
| our reliance on automated systems and the impact of any failure or disruption of these systems; | |
| the impact of the integration of our business units; | |
| the impact of changes in our business model; | |
| competitive practices in the industry, including significant fare restructuring activities, capacity reductions and in court or out of court restructuring by major airlines; | |
| the impact of industry consolidation; | |
| our ability to attract and retain qualified personnel; | |
| the impact of global instability, including the current instability in the Middle East, the continuing impact of the military presence in Iraq and Afghanistan and the terrorist attacks of September 11, 2001 and the potential impact of future hostilities, terrorist attacks, infectious disease outbreaks or other global events that affect travel behavior; | |
| changes in government legislation and regulation; |
3
| our ability to obtain and maintain adequate facilities and infrastructure to operate and grow our route network; | |
| the impact of environmental laws and regulations; | |
| costs of ongoing data security compliance requirements and the impact of any data security breach; | |
| interruptions or disruptions in service at one or more of our hub airports; | |
| the impact of any accident involving our aircraft; | |
| delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; | |
| the impact of possible future increases in insurance costs and disruptions to insurance markets; | |
| weather conditions; | |
| the cyclical nature of the airline industry; | |
| the impact of foreign currency exchange rate fluctuations; | |
| our ability to use pre-merger NOLs and certain other tax attributes; | |
| our ability to maintain contracts that are critical to our operations; | |
| our ability to attract and retain customers; and | |
| other risks and uncertainties listed from time to time in our reports to the Securities and Exchange Commission. |
4
29
Item 1.
Business
5
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First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
98
$
124
$
118
$
59
58
65
75
90
68
%
91
%
57
%
(35
%)
Substantial capacity reductions. Domestic ASMs are expected to
be down approximately 10% in 2009 as compared to 2008 for the
U.S. airline industry. These capacity cuts are expected to
minimize the impact of reduced passenger demand on revenue,
reduce costs and minimize cash burn.
Development and implementation of new revenue initiatives to
supplement existing sources of revenue.
Implementation of cost containment strategies to minimize
non-essential expenditures and conserve cash.
Enhancement of near-term liquidity through a number of
cash-raising initiatives such as traditional capital market
issuances, asset sales, sale and leaseback transactions and
prepaid sales of frequent flyer program miles to affinity card
issuers.
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7
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Number/Type
Capacity Purchase
49 regional jets
Capacity Purchase
55 turboprops
Capacity Purchase
70 regional jets
Capacity Purchase
49 regional jets and 6 turboprops
Capacity Purchase
9 regional jets
Capacity Purchase
58 regional jets
Prorate
13 turboprops
Prorate
3 regional jets
(1)
PSA and Piedmont are wholly owned subsidiaries of US Airways
Group.
8
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9
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10
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11
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Contract
Fleet Service
6,600
12/31/2011
(2)
Association IBT and CWA (the Association)
Passenger Service
6,800
12/31/2011
Mechanics, Stock Clerks and
Related
3,100
12/31/2011
(3)
Maintenance Training Instructors
30
12/31/2011
(4)
Dispatch
200
12/31/2009
Flight Crew Training Instructors
100
12/31/2011
Flight Simulator Engineers
50
12/31/2011
Pilots
2,700
12/31/2009
(5)
Flight Attendants
4,800
12/31/2011
(6)
Pilots
1,500
12/30/2006
(5)
Flight Attendants
2,300
05/04/2004
(6)
(1)
Approximate number of active full-time equivalent employees
covered by the contract as of December 31, 2008.
(2)
In May 2008, US Airways and IAM District 141 ratified a new
unified agreement that moved all US Airways fleet service
employees to one labor contract. The new contract moved
pre-merger AWA fleet service employees to the terms of the
pre-merger US Airways contract and modified the existing US
Airways agreement in ways that were mutually beneficial to the
employees and US Airways.
(3)
In April 2008, US Airways and IAM District 142 ratified a new
unified agreement that moved all US Airways maintenance
and related employees to one labor contract. The new contract
moved pre-merger AWA maintenance, stock clerk and related
employees to the higher pay scales of the pre-merger US Airways
labor contract and modified the existing US Airways labor
agreement in ways that were mutually beneficial to the employees
and US Airways.
(4)
In May 2008, US Airways and IAM District 142 ratified a new
agreement that moved all US Airways maintenance training
instructors to one labor contract.
(5)
Pilots continue to work under the terms of their separate US
Airways and AWA collective bargaining agreements, as modified by
the transition agreements reached in connection with the merger.
(6)
In negotiations for a single labor agreement applicable to both
US Airways and AWA. On December 15, 2005, the National
Mediation Board recessed AFAs separate contract
negotiations with AWA indefinitely. Flight attendants continue
to work under the terms of their separate US Airways and AWA
collective bargaining agreements, as modified by the transition
agreements reached in connection with the merger.
12
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Average Price
Aircraft Fuel
Percentage of Total
Gallons
per Gallon(1)
Expense(1)
Operating Expenses
1,142
$
3.17
$
3,618
33.3
%
1,195
2.20
2,630
30.7
%
1,210
2.08
2,518
29.8
%
(1)
Includes fuel taxes and excludes the impact of fuel hedges. The
impact of fuel hedges is described in Item 7 under US
Airways Groups Results of Operations and US
Airways Results of Operations.
the impact of global political instability on crude production;
unexpected changes to the availability of petroleum products due
to disruptions in distribution systems or refineries, as
evidenced in the third quarter of 2005 when Hurricane Katrina
and Hurricane Rita caused
13
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widespread disruption to oil production, refinery operations and
pipeline capacity along certain portions of the U.S. Gulf
Coast. As a result of these disruptions, the price of jet fuel
increased significantly and the availability of jet fuel
supplies was diminished;
unpredictable increases to oil demand due to weather or the pace
of economic growth;
inventory levels of crude, refined products and natural
gas; and
other factors, such as the relative fluctuation in value between
the U.S. dollar and other major currencies and the
influence of speculative positions on the futures exchanges.
liability for injury to members of the public, including
passengers;
damage to property of US Airways Group, its subsidiaries and
others;
loss of or damage to flight equipment, whether on the ground or
in flight;
fire and extended coverage;
directors and officers liability;
travel agents errors and omissions;
advertiser and media liability;
cyber risk liability;
fiduciary; and
workers compensation and employers liability.
14
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Full Year
2008
2007
2006
80.1
68.7
76.9
98.5
98.2
98.9
4.77
8.47
7.88
2.01
3.16
1.36
(a)
Percentage of reported flight operations arriving on time as
defined by the DOT.
(b)
Percentage of scheduled flight operations completed.
(c)
Rate of mishandled baggage reports per 1,000 passengers.
(d)
Rate of customer complaints filed with the DOT per 100,000
passengers.
15
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16
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Item 1A.
Risk
Factors
17
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A decrease in revenues results in a disproportionately greater
percentage decrease in earnings.
We may not have sufficient liquidity to fund all of these fixed
costs if our revenues decline or costs increase.
We may have to use our working capital to fund these fixed costs
instead of funding general corporate requirements, including
capital expenditures.
We may not have sufficient liquidity to respond to competitive
developments and adverse economic conditions.
18
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19
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20
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21
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22
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23
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24
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our operating results failing to meet the expectations of
securities analysts or investors;
changes in financial estimates or recommendations by securities
analysts;
material announcements by us or our competitors;
movements in fuel prices;
new regulatory pronouncements and changes in regulatory
guidelines;
general and industry-specific economic conditions;
public sales of a substantial number of shares of our common
stock; and
general market conditions.
a classified board of directors with three-year staggered terms;
advance notice procedures for stockholder proposals to be
considered at stockholders meetings;
the ability of US Airways Groups board of directors to
fill vacancies on the board;
a prohibition against stockholders taking action by written
consent;
a prohibition against stockholders calling special meetings of
stockholders;
a requirement that holders of at least 80% of the voting power
of the shares entitled to vote in the election of directors
approve amendment of the amended and restated bylaws; and
super-majority voting requirements to modify or amend specified
provisions of US Airways Groups amended and restated
certificate of incorporation.
25
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Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
Owned/
Avg. Seats
Mortgaged(1)
Leased(2)
Total
Avg. Age
293
4
5
9
8.3
183
20
13
33
6.4
150
8
67
75
10.7
124
3
90
93
8.2
204
10
10
19.4
189
3
36
39
18.7
144
40
40
18.8
131
30
30
21.0
99
25
25
1.0
150
63
291
354
11.8
(1)
All owned aircraft are pledged as collateral for various secured
financing agreements.
(2)
The terms of the leases expire between 2009 and 2024.
26
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Average Seat
Average
Capacity
Owned
Leased(1)
Total
Age (years)
70
7
7
14
4.3
50
12
23
35
4.8
50
11
11
17.3
37
33
11
44
18.3
47
52
52
104
11.8
(1)
The terms of the leases expire between 2009 and 2022.
2009
2010
2011
2012
2013
Thereafter
25
25
33
24
22
25
36
30
25
23
152
15
7
30
1
executive and administrative offices in Tempe, Arizona;
our principal operating, overhaul and maintenance bases at the
Pittsburgh International, Charlotte Douglas International and
Phoenix Sky Harbor International Airports;
training facilities in Phoenix and Charlotte;
central reservations offices in Winston-Salem, North Carolina,
Tempe, Arizona, Reno, Nevada, and Liverpool, U.K.; and
line maintenance bases and local ticket, cargo and
administrative offices throughout our system.
27
Table of Contents
Approximate
Internal Floor
Nine story complex housing headquarters for US Airways Group
218,000
Lease expires April 2014.
Administrative office complex
203,000
Lease expires May 2013.
68 preferential gates, exclusive ticket counter space, clubs,
support space and concourse areas
579,000
Lease expires June 2011.
Hangar bays, parts storage, ground service equipment shop,
employee support areas and administrative office space
399,000
Lease expires April 2030.
Cargo bays, security storage area, staging area, administrative
office space and customer service space
206,000
Lease expires December 2029.
36 exclusive gates, ticket counter space and concourse areas
226,000
Lease expires June 2016.
42 exclusive gates, ticket counter space and administrative
offices
330,000
Airport Use Agreement
expires June 2016. Gate use
governed by month-to-month
rates and charges program.
10 exclusive gates, ticket counter space and concourse areas
122,000
Lease expires May 2018.
19 preferential gates, exclusive club, ticket counter space,
support space and concourse areas
115,000
Lease expired June 2008.
Currently, operating
month-to-month
and a new
lease is under negotiation.
15 gates, ticket counter space and concourse areas
80,000
Lease expires September 2014.
Hangar bays, hangar shops, ground service equipment shops,
cargo, catering and warehouse
847,000
Lease expires June 2017.
Hangar bays, hangar shops, ground service equipment shops,
cargo, catering and warehouse
649,000
Lease expires December 2010.
28
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Approximate
Internal Floor
Four hangar bays, hangar shops, office space, warehouse and
commissary facilities
375,000
Lease expires September 2019.
Classroom training facilities and twelve full flight simulator
bays
159,000
Lease expires June 2017.
Complex accommodates training facilities, systems operation
control and crew scheduling functions
164,000
Lease expires February 2031.
Complex accommodates systems operation control and crew
scheduling functions
70,000
Facility owned, land lease
expires March 2029.
Item 3.
Legal
Proceedings
Item 4.
Submission
of Matters to a Vote of Security Holders
Table of Contents
35
121
164
171
172
173
174
175
176
177
Item 5.
Market
for US Airways Groups Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Year Ended
High
Low
Fourth Quarter
$
11.24
$
3.16
Third Quarter
10.46
1.45
Second Quarter
9.94
2.30
First Quarter
16.44
7.24
Fourth Quarter
$
33.45
$
14.41
Third Quarter
36.81
24.26
Second Quarter
48.30
26.78
First Quarter
62.50
44.01
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9/27/2005
12/31/2005
12/31/2006
12/31/2007
12/31/2008
$
100
$
192
$
279
$
76
$
40
100
133
142
84
59
100
103
117
121
74
31
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Item 6.
Selected
Financial Data
Year Ended December 31,
2008
2007
2006
2005
2004
(In millions except share data)
$
12,118
$
11,700
$
11,557
$
5,069
$
2,757
13,918
11,167
10,999
5,286
2,777
(1,800
)
533
558
(217
)
(20
)
(2,210
)
427
303
(335
)
(89
)
1
(202
)
$
(2,210
)
$
427
$
304
$
(537
)
$
(89
)
$
(22.06
)
$
4.66
$
3.50
$
(10.65
)
$
(5.99
)
(22.06
)
4.52
3.32
(10.65
)
(5.99
)
$
$
$
0.01
$
(6.41
)
$
0.01
(6.41
)
$
(22.06
)
$
4.66
$
3.51
$
(17.06
)
$
(5.99
)
(22.06
)
4.52
3.33
(17.06
)
(5.99
)
100,168
91,536
86,447
31,488
14,861
100,168
95,603
93,821
31,488
14,861
$
7,214
$
8,040
$
7,576
$
6,964
$
1,475
4,352
3,732
3,539
3,481
640
(505
)
1,439
970
420
36
(a)
The 2008 period included a $622 million non-cash charge to
write off all of the goodwill created by the merger of US
Airways Group and America West Holdings in September 2005, as
well as $496 million of net unrealized losses on fuel
hedging instruments. In addition, the 2008 period included
$35 million of merger related
32
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transition expenses, $18 million in non-cash charges
related to the decline in fair value of certain spare parts
associated with our Boeing 737 aircraft fleet and as a result of
our capacity reductions, $14 million in lease return costs
and penalties related to certain Airbus aircraft and
$9 million in charges related to involuntary furloughs as
well as terminations of non-union administrative and management
staff.
The 2007 period included $187 million of net unrealized
gains on fuel hedging instruments, $7 million in tax
credits due to an IRS rule change allowing us to recover tax
amounts for years
2003-2006
for certain fuel usage, $9 million of insurance settlement
proceeds related to business interruption and property damages
incurred as a result of Hurricane Katrina in 2005 and a
$5 million Piedmont pilot pension curtailment gain related
to the FAA mandated pilot retirement age change. These credits
were offset by $99 million of merger related transition
expenses, a $99 million charge for an increase to long-term
disability obligations for US Airways pilots as a result
of the FAA mandated pilot retirement age change and
$5 million in charges for certain separation packages and
lease termination costs related to reduced flying from
Pittsburgh.
The 2006 period included $131 million of merger related
transition expenses and $70 million of net unrealized
losses on fuel hedging instruments, offset by a $90 million
gain associated with the return of equipment deposits upon
forgiveness of a loan and $14 million of gains associated
with the settlement of bankruptcy claims.
The 2005 period included $28 million of merger related
transition expenses, a $27 million loss on the
sale-leaseback of six Boeing
737-300
aircraft and two Boeing 757 aircraft, $7 million of power
by the hour program penalties associated with the return of
certain leased aircraft, $1 million of severance for
terminated employees resulting from the merger, a
$1 million charge related to aircraft removed from service
and a $50 million charge related to an amended Airbus
purchase agreement, along with the write off of $7 million
in capitalized interest. The $50 million charge was paid by
means of set-off against existing equipment purchase deposits
held by Airbus. The 2005 period also included $4 million of
net unrealized gains on fuel hedging instruments.
The 2004 period included a $16 million net credit
associated with the termination of the rate per engine hour
agreement with General Electric Engine Services for overhaul
maintenance services on V2500-A1 engines. This credit was
partially offset by $2 million of net charges related to
the return of certain Boeing
737-200
aircraft, which included termination payments of
$2 million, the write down of leasehold improvements and
deferred rent of $3 million, offset by the net reversal of
maintenance reserves of $3 million related to the returned
aircraft. The 2004 period also included $2 million of net
unrealized losses on fuel hedging instruments.
(b)
The 2008 period included $214 million in non-cash charges
to record other than temporary impairments for our investments
in auction rate securities primarily driven by the length of
time and extent to which the fair values have been less than
cost as well as $7 million in write offs of debt discount
and debt issuance costs in connection with the refinancing of
certain aircraft equipment notes and certain loan prepayments in
connection with our 2008 financing transactions, offset by
$8 million in gains on forgiveness of debt.
The 2007 period included a non-cash expense for income taxes of
$7 million related to the utilization of net operating loss
carryforwards (NOL) acquired from US Airways. The
valuation allowance associated with these acquired NOL was
recognized as a reduction of goodwill rather than a reduction in
tax expense. In addition, the period also included an
$18 million write off of debt issuance costs in connection
with the refinancing of the $1.25 billion senior secured
credit facility with General Electric Capital Corporation
(GECC), referred to as the GE loan, in March 2007
and a $10 million non-cash charge to record other than
temporary impairment for our investments in auction rate
securities, offset by a $17 million gain recognized on the
sale of stock in ARINC Incorporated.
The 2006 period included a non-cash expense for income taxes of
$85 million related to the utilization of NOL acquired from
US Airways. In addition, the period included $6 million of
prepayment penalties and $5 million in accelerated
amortization of debt issuance costs in connection with the
refinancing of the loan previously guaranteed by the Air
Transportation Stabilization Board (ATSB) and two
loans previously provided to AWA by GECC, $17 million in
payments in connection with the inducement to convert
$70 million of US Airways Groups 7% Senior
Convertible Notes to common stock and a $2 million write
off of debt issuance costs associated with those converted
notes, offset by $8 million of interest income earned by
AWA on certain prior year federal income tax refunds.
The 2005 period included an $8 million charge related to
the write off of the unamortized value of the ATSB warrants upon
their repurchase in October 2005 and an aggregate
$2 million write off of debt issuance costs
33
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associated with the exchange of AWAs 7.25% Senior
Exchangeable Notes due 2023 and retirement of a portion of the
loan formerly guaranteed by the ATSB. In the fourth quarter 2005
period, which was subsequent to the effective date of the
merger, US Airways recorded $4 million of mark-to-market
gains attributable to stock options in Sabre Inc.
(Sabre) and warrants in a number of
e-commerce
companies.
The 2004 period included a $1 million gain on the
disposition of property and equipment due principally to the
sale of one Boeing
737-200
aircraft and a $1 million charge for the write off of debt
issuance costs in connection with the refinancing of a term loan.
(c)
The 2006 period included a $1 million benefit which
represents the cumulative effect on the accumulated deficit of
the adoption of Statement of Financial Accounting Standards
(SFAS) No. 123R, Share-Based
Payment. The adjustment reflects the impact of estimating
future forfeitures for previously recognized compensation
expense.
The 2005 period included a $202 million adjustment which
represents the cumulative effect on the accumulated deficit of
the adoption of the direct expense method of accounting for
major scheduled airframe, engine and certain component overhaul
costs as of January 1, 2005.
(d)
Includes debt, capital leases, postretirement benefits other
than pensions and employee benefit liabilities and other.
Successor Company(a)
Predecessor Company(a)
Three Months
Nine Months
Year Ended
Year Ended
Year Ended
Ended
Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
September 30,
December 31,
2008
2007
2006
2005
2005
2004
(In millions)
$
12,244
$
11,813
$
11,692
$
2,589
$
5,452
$
7,068
14,017
11,289
11,135
2,772
5,594
7,416
(1,773
)
524
557
(183
)
(142
)
(348
)
(2,148
)
478
348
(256
)
280
(578
)
1
$
(2,148
)
$
478
$
349
$
(256
)
$
280
$
(578
)
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Successor Company (a)
Predecessor Company(a)
December 31,
2008
2007
2006
2005
2004
(In millions)
$
6,954
$
7,787
$
7,351
$
6,763
$
8,250
2,925
2,073
2,194
3,306
4,815
(221
)
1,850
(461
)
(810
)
(501
)
(a)
In connection with emergence from bankruptcy in September 2005,
US Airways adopted fresh-start reporting in accordance with
AICPA Statement of Position
90-7,
Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code. As a result of the application of
fresh-start reporting, the financial statements after
September 30, 2005 are not comparable with the financial
statements from periods prior to September 30, 2005.
References to Successor Company refer to US Airways
on and after September 30, 2005, after the application of
fresh-start reporting for the bankruptcy.
(b)
The 2008 period included a $622 million non-cash charge to
write off all of the goodwill created by the merger of US
Airways Group and America West Holdings in September 2005, as
well as $496 million of net unrealized losses on fuel
hedging instruments. In addition, the 2008 period included
$35 million of merger related transition expenses,
$18 million in non-cash charges related to the decline in
fair value of certain spare parts associated with US
Airways Boeing 737 aircraft fleet and as a result of US
Airways capacity reductions, $14 million in lease
return costs and penalties related to certain Airbus aircraft
and $9 million in charges related to involuntary furloughs
as well as terminations of non-union administrative and
management staff.
The 2007 period included $187 million of net unrealized
gains on fuel hedging instruments, $7 million in tax
credits due to an IRS rule change allowing US Airways to recover
tax amounts for years
2003-2006
for certain fuel usage and $9 million of insurance
settlement proceeds related to business interruption and
property damages incurred as a result of Hurricane Katrina in
2005. These credits were offset by $99 million of merger
related transition expenses, a $99 million charge for an
increase to long-term disability obligations for US
Airways pilots as a result of the FAA mandated pilot
retirement age change and $4 million in charges for certain
separation packages and lease termination costs related to
reduced flying from Pittsburgh.
The 2006 period included $131 million of merger related
transition expenses and $70 million of net unrealized
losses on fuel hedging instruments, offset by a $90 million
gain associated with the return of equipment deposits upon
forgiveness of a loan and $3 million of gains associated
with the settlement of bankruptcy claims.
The period for the three months ended December 31, 2005
included $69 million of net unrealized losses on fuel
hedging instruments, $28 million of merger related
transition expenses, $7 million of power by the hour
program penalties associated with the return of certain leased
aircraft and $1 million of severance costs for terminated
employees resulting from the merger.
(c)
The 2008 period included $214 million in non-cash charges
to record other than temporary impairments for US Airways
investments in auction rate securities primarily driven by the
length of time and extent to which the fair values have been
less than cost as well as $6 million in write offs of debt
discount and debt issuance costs in connection with the
refinancing of certain aircraft equipment notes and a loan
prepayment in connection with US Airways 2008 financing
transactions, offset by $8 million in gains on forgiveness
of debt.
The 2007 period included a non-cash expense for income taxes of
$7 million related to the utilization of NOL that was
generated prior to the merger. The decrease in the corresponding
valuation allowance was recognized as a reduction of goodwill
rather than a reduction in tax expense. In addition, the period
also included a $17 million gain recognized on the sale of
stock in ARINC Incorporated, offset by a $10 million
non-cash charge to record other than temporary impairment for US
Airways investments in auction rate securities.
The 2006 period included a non-cash expense for income taxes of
$85 million related to the utilization of NOL that was
generated prior to the merger. In addition, the period included
$6 million of prepayment penalties and $5 million in
accelerated amortization of debt issuance costs in connection
with the refinancing of the loan
Table of Contents
previously guaranteed by the ATSB and two loans previously
provided to AWA by GECC, offset by $8 million of interest
income earned by AWA on certain prior year federal income tax
refunds.
The period for the three months ended December 31, 2005
included an $8 million charge related to the write off of
the unamortized value of the ATSB warrants upon their repurchase
in October 2005 and an aggregate $2 million write off of
debt issuance costs associated with the exchange of AWAs
7.25% Senior Exchangeable Notes due 2023 and retirement of
a portion of the loan formerly guaranteed by the ATSB. US
Airways also recorded in this period $4 million of
mark-to-market gains attributable to stock options in Sabre and
warrants in a number of
e-commerce
companies.
The nine months ended September 30, 2005 and the year ended
December 31, 2004 included reorganization items which
amounted to a $636 million net gain and a $32 million
expense, respectively.
(d)
The 2006 period included a $1 million benefit which
represents the cumulative effect on the accumulated deficit of
the adoption of SFAS No. 123R. The adjustment reflects the
impact of estimating future forfeitures for previously
recognized compensation expense.
(e)
Includes debt, capital leases, postretirement benefits other
than pensions and employee benefit liabilities and other. Also
includes liabilities subject to compromise at December 31,
2004.
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
98
$
124
$
118
$
59
58
65
75
90
68
%
91
%
57
%
(35
%)
36
Table of Contents
Substantial capacity reductions. Domestic ASMs are expected to
be down approximately 10% in 2009 as compared to 2008 for the
U.S. airline industry. These capacity cuts are expected to
minimize the impact of reduced passenger demand on revenue,
reduce costs and minimize cash burn.
Development and implementation of new revenue initiatives to
supplement existing sources of revenue.
Implementation of cost containment strategies to minimize
non-essential expenditures and conserve cash.
Enhancement of near-term liquidity through a number of
cash-raising initiatives such as traditional capital market
issuances, asset sales, sale and leaseback transactions and
prepaid sales of miles to affinity card issuers.
Fleet Reduction: We announced the return of ten
aircraft to lessors, which included six Boeing
737-300
aircraft returned in 2008 and early 2009 as well as four Airbus
A320 aircraft to be returned in the first half of 2009. We have
also cancelled the leases of two A330-200 wide-body aircraft
that had been scheduled for delivery in the second half of 2009.
Further, we plan to reduce additional aircraft in 2009 and 2010.
Las Vegas Flight Reduction: We closed our Las Vegas
night operation, except for limited night service to the East
Coast, in early September 2008. In the current environment, the
revenue generated from the Las Vegas night operation no longer
exceeded the incremental cost of that flying. Overall, daily
departures from Las Vegas, which were as high as 141 during
September 2007, have been reduced to 77 as of the end of 2008.
37
Table of Contents
Employee Reduction: As a result of the reduced flying, we
required approximately 2,200 fewer positions across the system,
including approximately 300 pilots, 400 flight attendants, 800
airport employees and 700 non-union administrative management
and staff. These headcount reductions were implemented through a
combination of voluntary and involuntary furloughs and attrition.
Reduced Capital Expenditures: We reduced our 2008 planned
non-aircraft capital expenditures by $80 million, while
maintaining critical operational projects such as our
Reliability, Convenience and Appearance (RCA)
initiative, which includes cabin refurbishments, improved and
additional check-in kiosks, airport club refurbishments,
facility upgrades, new gate reading technology and the
completion of our next generation website.
Closed Certain Facilities: The US Airways Club in the
Baltimore/Washington International Airport, arrivals lounges in
Munich, Rome and Zurich, and cargo stations in Burbank, Colorado
Springs and Reno were closed during 2008.
Reduced Partner Costs: We have revised our wholesale programs
for cruise lines, tour operators and consolidators, which
included the reduction of the number of agency partners,
decreased discounts, tighter restrictions on travel rules, and a
reduction in commissions.
In August 2008, we completed an underwritten public stock
offering of 19 million common shares, as well as the full
exercise of 2.85 million common shares included in an
overallotment option, at an offering price of $8.50 per share.
Net proceeds from the offering, after underwriting discounts and
commissions, were $179 million. We used the proceeds from
the offering for general corporate purposes.
On October 20, 2008, we completed a series of financial
transactions which raised approximately $810 million in
gross proceeds and included a $400 million paydown at par
of our $1.6 billion credit facility administered by
Citicorp North America. In exchange for this prepayment, the
unrestricted cash covenant contained in the Citicorp credit
facility was reduced from $1.25 billion to
$850 million. The credit facilitys term remained the
same at seven years with substantially all of the remaining
principal amount payable at maturity in March 2014. Our net
proceeds after transaction fees were approximately
$370 million.
On December 5, 2008, we prepaid $100 million of the
indebtedness incurred in October 2008 related to a loan secured
by certain spare parts. On January 16, 2009, we exercised
our right to obtain new loan commitments under the same
agreement and raised $50 million.
38
Table of Contents
2008
2007
$
1,054
$
2,174
726
468
187
353
$
1,967
$
2,995
Cash used in operations to fund losses resulting from record
high fuel costs in 2008.
$461 million that we posted in collateral in the form of
$276 million of cash deposits and $185 million in
restricted cash related to letters of credit collateralizing
certain counterparties to our fuel hedging transactions.
$430 million in cash, net of debt financings, for the
acquisition of new aircraft along with non-aircraft capital
expenditures to support our RCA initiatives.
Additional holdback requirements, reflected in the increase in
restricted cash, by certain credit card processors for advance
ticket sales for which we have not yet provided air
transportation.
39
Table of Contents
Full Year
2008
2007
2006
80.1
68.7
76.9
98.5
98.2
98.9
4.77
8.47
7.88
2.01
3.16
1.36
(a)
Percentage of reported flight operations arriving on time as
defined by the DOT.
(b)
Percentage of scheduled flight operations completed.
(c)
Rate of mishandled baggage reports per 1,000 passengers.
(d)
Rate of customer complaints filed with the DOT per 100,000
passengers.
a $622 million non-cash charge to write off all of the
goodwill created by the merger of US Airways Group and America
West Holdings in September 2005.
$214 million in other than temporary non-cash impairment
charges included in nonoperating expense for our investments in
auction rate securities primarily driven by the length of time
and extent to which the fair value has been less than cost for
these securities.
$496 million of net unrealized losses resulting from the
application of mark-to-market accounting for changes in the fair
value of fuel hedging instruments, offset by $140 million
of net realized gains on settled fuel hedge transactions. The
net unrealized losses were primarily driven by the significant
decrease in the
40
Table of Contents
price of oil in the latter part of 2008. We are required to use
mark-to-market accounting as our existing fuel hedging
instruments do not meet the requirements for hedge accounting
established by SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. If these
instruments had qualified for hedge accounting treatment, any
unrealized gains or losses, including the $496 million
discussed above, would have been deferred in other comprehensive
income, a component of stockholders equity, until the jet
fuel is purchased and the underlying fuel hedging instrument is
settled. Given the market volatility of jet fuel, the fair value
of these fuel hedging instruments is expected to change until
settled.
$76 million of net special charges, consisting of
$35 million of merger related transition expenses,
$18 million in non-cash charges related to the decline in
fair value of certain spare parts associated with our Boeing 737
aircraft fleet and as a result of our capacity reductions,
$14 million in lease return costs and penalties related to
certain Airbus aircraft and $9 million in severance charges.
$8 million in gains on forgiveness of debt, offset by
$7 million in write offs of debt discount and debt issuance
costs due to the refinancing of certain aircraft equipment notes
and certain loan prepayments in connection with our 2008
financing transactions, all included in nonoperating expense.
$187 million of net unrealized gains resulting from the
application of mark-to-market accounting for changes in the fair
value of fuel hedging instruments as well as $58 million of
net realized gains on settled fuel hedge transactions.
$99 million of net special charges due to merger related
transition expenses.
a $99 million charge for an increase to long-term
disability obligations for US Airways pilots as a result
of a change in the FAA mandated retirement age for pilots from
60 to 65.
$7 million in tax credits due to an IRS rule change
allowing us to recover certain fuel usage tax amounts for years
2003-2006,
$9 million of insurance settlement proceeds related to
business interruption and property damages incurred as a result
of Hurricane Katrina in 2005 and a $5 million Piedmont
pilot pension curtailment gain related to the FAA mandated pilot
retirement age change discussed above. These gains were offset
in part by $5 million in charges related to reduced flying
from Pittsburgh.
an $18 million write off of debt issuance costs in
connection with the refinancing of the $1.25 billion GE
loan in March 2007 and $10 million in other than temporary
impairment charges for our investments in auction rate
securities, offset by a $17 million gain recognized on the
sale of stock in ARINC Incorporated, all included in
nonoperating expense.
$70 million of net unrealized losses resulting from the
application of mark-to-market accounting for changes in the fair
value of fuel hedging instruments as well as $9 million of
net realized losses on settled fuel hedge transactions.
$27 million of net special charges, consisting of
$131 million of merger related transition expenses, offset
by a $90 million credit related to the restructuring of the
then existing Airbus aircraft order and $14 million of
credits related to the settlement of certain bankruptcy-related
claims.
$6 million of expense related to prepayment penalties and
$5 million in accelerated amortization of debt issuance
costs in connection with the refinancing of the loan previously
guaranteed by the ATSB and two loans previously provided to AWA
by GECC, $17 million in payments in connection with the
inducement to convert $70 million of the 7% Senior
Convertible Notes to common stock and a $2 million write
off of debt issuance costs associated with those converted
notes, offset by $8 million of interest income earned by
AWA on certain prior year federal income tax refunds, all
included in nonoperating expense.
41
Table of Contents
Percent
Percent
Year Ended December 31,
Change
Change
2008
2007
2006
2008-2007
2007-2006
60,570
61,262
60,689
(1.1
)
0.9
74,151
75,842
76,983
(2.2
)
(1.5
)
81.7
80.8
78.8
0.9
pts
2.0
pts
13.51
13.28
13.13
1.7
1.2
11.04
10.73
10.35
2.9
3.7
14.66
11.30
10.96
29.7
3.1
54,820
57,871
57,345
(5.3
)
0.9
496
525
542
(5.5
)
(3.1
)
354
356
359
(0.6
)
(0.8
)
1,300
1,343
1,365
(3.3
)
(1.6
)
955
925
927
3.3
(0.3
)
1,554
1,489
1,478
4.4
0.7
1,142
1,195
1,210
(4.4
)
(1.3
)
3.17
2.20
2.08
43.9
5.8
32,671
34,437
34,077
(5.1
)
1.1
(a)
Revenue passenger mile (RPM) A basic
measure of sales volume. A RPM represents one passenger flown
one mile.
(b)
Available seat mile (ASM) A basic
measure of production. An ASM represents one seat flown one mile.
42
Table of Contents
(c)
Passenger load factor The percentage of available
seats that are filled with revenue passengers.
(d)
Yield A measure of airline revenue derived by
dividing passenger revenue by revenue passenger miles and
expressed in cents per mile.
(e)
Passenger revenue per available seat mile
(PRASM) Total passenger revenues divided
by total available seat miles.
(f)
Operating cost per available seat mile
(CASM) Total mainline operating expenses
divided by total available seat miles.
(g)
Passenger enplanements The number of passengers on
board an aircraft including local, connecting and through
passengers.
(h)
Block hours The hours measured from the moment an
aircraft first moves under its own power, including taxi time,
for the purposes of flight until the aircraft is docked at the
next point of landing and its power is shut down.
(i)
Average stage length The average of the distances
flown on each segment of every route.
(j)
Average passenger journey The average one-way trip
measured in statute miles for one passenger origination.
Percent
2008
2007
Change
(In millions)
$
8,183
$
8,135
0.6
2,879
2,698
6.7
144
138
3.7
912
729
25.3
$
12,118
$
11,700
3.6
43
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Percent
2008
2007
Change
(In millions)
$
3,618
$
2,630
37.6
(140
)
(58
)
nm
496
(187
)
nm
2,231
2,302
(3.1
)
724
727
(0.4
)
783
635
23.2
562
536
4.9
439
453
(3.2
)
76
99
(23.2
)
215
189
13.7
622
nm
1,243
1,247
(0.2
)
10,869
8,573
26.8
1,137
765
48.6
1,912
1,829
4.5
3,049
2,594
17.5
$
13,918
$
11,167
24.6
44
Table of Contents
Year Ended
December 31,
Percent
2008
2007
Change
(In cents)
4.88
3.47
40.7
0.48
(0.32
)
nm
3.01
3.03
(0.8
)
0.98
0.96
2.2
1.05
0.84
25.4
0.76
0.70
7.6
0.59
0.60
(1.2
)
0.10
0.13
(23.2
)
0.29
0.25
16.4
0.84
nm
1.68
1.64
2.2
14.66
11.30
29.7
Aircraft fuel and related taxes per ASM increased 40.7% due
primarily to a 43.9% increase in the average price per gallon of
fuel to a record high $3.17 in 2008 from $2.20 in 2007, offset
by a 4.4% decrease in gallons consumed.
Loss (gain) on fuel hedging instruments, net per ASM fluctuated
from a gain of 0.32 cents in 2007 to a loss of 0.48 cents in
2008. The net loss in the 2008 period is the result of net
unrealized losses of $496 million on open fuel hedge
transactions, offset by $140 million of net realized gains
on settled fuel hedge transactions. Our fuel hedging program
uses no premium collars, which establish an upper and lower
limit on heating oil futures prices, to provide protection from
fuel price risks. We use heating oil as it is a commodity with
prices that are generally highly correlated with jet fuel
prices. We recognized net gains from our fuel hedging program in
the first half of 2008 as the price of heating oil exceeded the
upper limit on certain of our collar transactions. However, the
significant decline in the price of oil in the latter part of
2008 generated unrealized losses on certain open fuel hedge
transactions as the price of heating oil fell below the lower
limit of those collar transactions.
Aircraft maintenance expense per ASM increased 25.4% due
principally to increases in the number of engine and landing
gear overhauls performed in 2008 as compared to 2007.
Other rent and landing fees per ASM increased 7.6% due primarily
to increases in rental rates at certain airports in the 2008
period as compared to the 2007 period.
Depreciation and amortization per ASM increased 16.4% due to the
acquisition of 14 Embraer aircraft and five Airbus aircraft in
2008, which increased depreciation expense on owned aircraft.
45
Table of Contents
Percent
2008
2007
Change
(In millions)
$
83
$
172
(51.6
)
(253
)
(273
)
(7.3
)
(240
)
2
nm
$
(410
)
$
(99
)
nm
Percent
2007
2006
Change
(In millions)
$
8,135
$
7,966
2.1
2,698
2,744
(1.7
)
138
153
(9.4
)
729
694
4.9
$
11,700
$
11,557
1.2
46
Table of Contents
Percent
2007
2006
Change
(In millions)
$
2,630
$
2,518
4.4
(58
)
9
nm
(187
)
70
nm
2,302
2,090
10.1
727
732
(0.6
)
635
582
9.1
536
568
(5.7
)
453
446
1.6
99
27
nm
189
175
8.2
1,247
1,223
2.0
8,573
8,440
1.6
765
764
0.1
1,829
1,795
1.9
2,594
2,559
1.4
$
11,167
$
10,999
1.5
47
Table of Contents
Year Ended
December 31,
Percent
2007
2006
Change
(In cents)
3.47
3.27
6.0
(0.32
)
0.10
nm
3.03
2.71
11.8
0.96
0.95
0.9
0.84
0.75
10.8
0.70
0.74
(4.3
)
0.60
0.58
3.1
0.13
0.04
nm
0.25
0.23
9.9
1.64
1.59
3.5
11.30
10.96
3.1
Aircraft fuel and related taxes per ASM increased 6% due
primarily to a 5.8% increase in the average price per gallon of
fuel to $2.20 in 2007 from $2.08 in 2006.
Loss (gain) on fuel hedging instruments, net per ASM fluctuated
from a loss of 0.10 cents in 2006 to a gain of 0.32 cents in
2007. The net gain in the 2007 period is the result of net
unrealized gains of $187 million on open fuel hedge
transactions as well as $58 million of net realized gains
on settled fuel hedge transactions. We recognized net gains from
our fuel hedging program in 2007 as the price of heating oil
exceeded the upper limit on certain of our collar transactions.
Salaries and related costs per ASM increased 11.8% due to a
$99 million charge for an increase to long-term disability
obligations for US Airways pilots as a result of a change
in the FAA mandated retirement age for pilots from 60 to 65 as
well as a period over period increase in headcount, principally
in fleet and passenger service employees as part of our
initiative to improve operational performance, and increases in
employee benefits as a result of higher medical claims due to
general inflationary cost increases.
Aircraft maintenance expense per ASM increased 10.8% due
principally to an increase in the number of overhauls performed
on engines not subject to power by the hour maintenance
agreements as well as an increase in the volume of seat
overhauls and thrust reverser repairs in the 2007 period
compared to the 2006 period.
Depreciation and amortization per ASM increased 9.9% due to the
acquisition of nine Embraer 190 aircraft and equipment to
support flight operations in 2007, which increased depreciation
expense on owned aircraft and equipment.
48
Table of Contents
Percent
2007
2006
Change
(In millions)
$
172
$
153
12.5
(273
)
(295
)
(7.5
)
2
(12
)
nm
$
(99
)
$
(154
)
(35.7
)
a $622 million non-cash charge to write off all of the
goodwill created by the merger of US Airways Group and America
West Holdings in September 2005.
49
Table of Contents
$214 million in other than temporary non-cash impairment
charges included in nonoperating expense for its investments in
auction rate securities primarily driven by the length of time
and extent to which the fair value has been less than cost for
these securities.
$496 million of net unrealized losses resulting from the
application of mark-to-market accounting for changes in the fair
value of fuel hedging instruments, offset by $140 million
of net realized gains on settled fuel hedge transactions. The
net unrealized losses were primarily driven by the significant
decrease in the price of oil in the latter part of 2008. US
Airways is required to use mark-to-market accounting as its
existing fuel hedging instruments do not meet the requirements
for hedge accounting established by SFAS No. 133. If
these instruments had qualified for hedge accounting treatment,
any unrealized gains or losses, including the $496 million
discussed above, would have been deferred in other comprehensive
income, a component of stockholders equity, until the jet
fuel is purchased and the underlying fuel hedging instrument is
settled. Given the market volatility of jet fuel, the fair value
of these fuel hedging instruments is expected to change until
settled.
$76 million of net special charges, consisting of
$35 million of merger related transition expenses,
$18 million in non-cash charges related to the decline in
fair value of certain spare parts associated with US
Airways Boeing 737 aircraft fleet and as a result of US
Airways capacity reductions, $14 million in lease
return costs and penalties related to certain Airbus aircraft
and $9 million in severance charges.
$8 million in gains on forgiveness of debt, offset by
$6 million in write offs of debt discount and debt issuance
costs due to the refinancing of certain aircraft equipment notes
and a loan prepayment in connection with US Airways 2008
financing transactions, all included in nonoperating expense.
$187 million of net unrealized gains resulting from the
application of mark-to-market accounting for changes in the fair
value of fuel hedging instruments as well as $58 million of
net realized gains on settled fuel hedge transactions.
$99 million of net special charges due to merger related
transition expenses.
a $99 million charge for an increase to long-term
disability obligations for US Airways pilots as a result
of a change in the FAA mandated retirement age for pilots from
60 to 65.
$7 million in tax credits due to an IRS rule change
allowing US Airways to recover certain fuel usage tax amounts
for years
2003-2006
and $9 million of insurance settlement proceeds related to
business interruption and property damages incurred as a result
of Hurricane Katrina in 2005. These gains were offset in part by
$4 million in charges related to reduced flying from
Pittsburgh.
a $17 million gain recognized on the sale of stock in ARINC
Incorporated, offset by $10 million in other than temporary
impairment charges for US Airways investments in auction
rate securities, all included in nonoperating expense.
$70 million of net unrealized losses resulting from the
application of mark-to-market accounting for changes in the fair
value of fuel hedging instruments as well as $9 million of
net realized losses on settled fuel hedge transactions.
$38 million of net special charges, consisting of
$131 million of merger related transition expenses, offset
by a $90 million credit related to the restructuring of the
then existing Airbus aircraft order and $3 million of
credits related to the settlement of certain bankruptcy-related
claims.
$6 million of expense related to prepayment penalties and
$5 million in accelerated amortization of debt issuance
costs in connection with the refinancing of the loan previously
guaranteed by the ATSB and two
50
Table of Contents
loans previously provided to AWA by GECC, offset by
$8 million of interest income earned by AWA on certain
prior year federal income tax refunds, all included in
nonoperating expense.
Percent
Percent
Year Ended December 31,
Change
Change
2008
2007
2006
2008-2007
2007-2006
60,570
61,262
60,689
(1.1
)
0.9
74,151
75,842
76,983
(2.2
)
(1.5
)
81.7
80.8
78.8
0.9
pts
2.0
pts
13.51
13.28
13.13
1.7
1.2
11.04
10.73
10.35
2.9
3.7
354
356
359
(0.6
)
(0.8
)
(a)
Revenue passenger mile (RPM) A basic
measure of sales volume. A RPM represents one passenger flown
one mile.
(b)
Available seat mile (ASM) A basic
measure of production. An ASM represents one seat flown one mile.
(c)
Passenger load factor The percentage of available
seats that are filled with revenue passengers.
(d)
Yield A measure of airline revenue derived by
dividing passenger revenue by revenue passenger miles and
expressed in cents per mile.
(e)
Passenger revenue per available seat mile
(PRASM) Total passenger revenues divided
by total available seat miles.
51
Table of Contents
Percent
2008
2007
Change
(In millions)
$
8,183
$
8,135
0.6
2,879
2,698
6.7
144
138
3.7
1,038
842
23.3
$
12,244
$
11,813
3.6
52
Table of Contents
Percent
2008
2007
Change
(In millions)
$
3,618
$
2,630
37.6
(140
)
(58
)
nm
496
(187
)
nm
2,231
2,302
(3.1
)
724
727
(0.4
)
783
635
23.2
562
536
4.9
439
453
(3.2
)
76
99
(23.2
)
224
198
13.1
622
nm
1,243
1,227
1.5
10,878
8,562
27.1
1,137
765
48.6
2,002
1,962
2.0
3,139
2,727
15.1
$
14,017
$
11,289
24.2
Aircraft fuel and related taxes increased 37.6% due primarily to
a 43.9% increase in the average price per gallon of fuel to a
record high $3.17 in 2008 from $2.20 in 2007, offset by a 4.4%
decrease in gallons consumed.
Loss (gain) on fuel hedging instruments, net fluctuated from a
net gain of $245 million in 2007 to a net loss of
$356 million in 2008. The net loss in the 2008 period is
the result of net unrealized losses of $496 million on open
fuel hedge transactions, offset by $140 million of net
realized gains on settled fuel hedge transactions. US
Airways fuel hedging program uses no premium collars,
which establish an upper and lower limit on heating oil futures
prices, to provide protection from fuel price risks. US Airways
uses heating
53
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oil as it is a commodity with prices that are generally highly
correlated with jet fuel prices. US Airways recognized net gains
from its fuel hedging program in the first half of 2008 as the
price of heating oil exceeded the upper limit on certain of its
collar transactions. However, the significant decline in the
price of oil in the latter part of 2008 generated unrealized
losses on certain open fuel hedge transactions as the price of
heating oil fell below the lower limit of those collar
transactions.
Aircraft maintenance expense increased 23.2% due principally to
increases in the number of engine and landing gear overhauls
performed in 2008 as compared to 2007.
Other rent and landing fees increased 4.9% due primarily to
increases in rental rates at certain airports in the 2008 period
as compared to the 2007 period.
Depreciation and amortization increased 13.1% due to the
acquisition of 14 Embraer aircraft and five Airbus aircraft in
2008, which increased depreciation expense on owned aircraft.
Percent
2008
2007
Change
(In millions)
$
83
$
172
(51.6
)
(218
)
(229
)
(5.1
)
(240
)
18
nm
$
(375
)
$
(39
)
nm
54
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Percent
2007
2006
Change
(In millions)
$
8,135
$
7,966
2.1
2,698
2,744
(1.7
)
138
153
(9.4
)
842
829
1.5
$
11,813
$
11,692
1.0
55
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Percent
2007
2006
Change
(In millions)
$
2,630
$
2,518
4.4
(58
)
9
nm
(187
)
70
nm
2,302
2,090
10.1
727
732
(0.6
)
635
582
9.1
536
568
(5.7
)
453
446
1.6
99
38
nm
198
184
8.1
1,227
1,228
(0.1
)
8,562
8,465
1.1
765
764
0.1
1,962
1,906
2.9
2,727
2,670
2.1
$
11,289
$
11,135
1.4
Aircraft fuel and related taxes increased 4.4% due primarily to
a 5.8% increase in the average price per gallon of fuel to $2.20
in 2007 from $2.08 in 2006.
Loss (gain) on fuel hedging instruments, net fluctuated from a
loss of $79 million in 2006 to a gain of $245 million
in 2007. The net gain in the 2007 period is the result of net
unrealized gains of $187 million on open fuel hedge
transactions as well as $58 million of net realized gains
on settled fuel hedge transactions. US Airways recognized net
gains from its fuel hedging program in 2007 as the price of
heating oil exceeded the upper limit on certain of its collar
transactions.
Salaries and related costs increased 10.1% due to a
$99 million charge for an increase to long-term disability
obligations for US Airways pilots as a result of a change
in the FAA mandated retirement age for pilots from 60 to 65 as
well as a period over period increase in headcount, principally
in fleet and passenger service
56
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employees as part of US Airways initiative to improve
operational performance, and increases in employee benefits as a
result of higher medical claims due to general inflationary cost
increases.
Aircraft maintenance expense increased 9.1% due principally to
an increase in the number of overhauls performed on engines not
subject to power by the hour maintenance agreements as well as
an increase in the volume of seat overhauls and thrust reverser
repairs in the 2007 period compared to the 2006 period.
Depreciation and amortization increased 8.1% due to the
acquisition of nine Embraer 190 aircraft and equipment to
support flight operations in 2007, which increased depreciation
expense on owned aircraft and equipment.
Percent
2007
2006
Change
(In millions)
$
172
$
153
12.5
(229
)
(268
)
(14.4
)
18
4
nm
$
(39
)
$
(111
)
(64.7
)
57
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58
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59
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60
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61
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62
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63
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64
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65
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S&P
Fitch
Moodys
Local Issuer
Issuer Default
Corporate
credit rating
credit rating
Family rating
B-
CCC
Caa1
B-
*
*
(*)
The credit agencies do not rate these categories for US Airways.
66
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67
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Payments Due by Period
2009
2010
2011
2012
2013
Thereafter
Total
$
16
$
33
$
116
$
99
$
16
$
1,178
$
1,458
50
50
46
41
38
50
275
356
221
257
246
192
1,423
2,695
146
148
157
129
87
415
1,082
2,408
2,312
2,138
1,537
664
5,315
14,374
1,008
1,013
1,031
902
731
2,712
7,397
10
2
1
1
1
15
$
3,994
$
3,779
$
3,746
$
2,955
$
1,729
$
11,093
$
27,296
(1)
These commitments represent those specifically entered into by
US Airways Group or joint commitments entered into by US Airways
Group and US Airways under which each entity is jointly and
severally liable.
(2)
Excludes $44 million of unamortized debt discount as of
December 31, 2008.
(3)
For variable-rate debt, future interest obligations are shown
above using interest rates in effect as of December 31,
2008.
(4)
Commitments listed separately under US Airways and its wholly
owned subsidiaries represent commitments under agreements
entered into separately by those companies.
(5)
Excludes $113 million of unamortized debt discount as of
December 31, 2008.
(6)
Includes $540 million of future principal payments and
$260 million of future interest payments as of
December 31, 2008, respectively, related to pass through
trust certificates or EETCs associated with mortgage financings
for the purchase of certain aircraft as described above under
Off-Balance Sheet Arrangements and in Note 9(c)
to US Airways Groups and Note 8(c) to US
Airways consolidated financial statements in Item 8A
and 8B of this report, respectively.
(7)
Includes $3.57 billion of future minimum lease payments
related to EETC leveraged leased financings of certain aircraft
as of December 31, 2008, as described above under
Off-Balance Sheet Arrangements and in Note 9(c)
to US Airways Groups and Note 8(c) to US
Airways consolidated financial statements in Item 8A
and 8B of this report, respectively.
(8)
Represents minimum payments under capacity purchase agreements
with third-party Express carriers.
(9)
Represents operating lease commitments entered into by US
Airways Groups other airline subsidiaries Piedmont and PSA.
68
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69
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Goodwill
$
622
(622
)
$
70
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Observable inputs such as quoted prices in active markets;
Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and
Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.
71
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72
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73
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74
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Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
the impact of global political instability on crude production;
unexpected changes to the availability of petroleum products due
to disruptions in distribution systems or refineries as
evidenced in the third quarter of 2005 when Hurricane Katrina
and Hurricane Rita caused widespread disruption to oil
production, refinery operations and pipeline capacity along
certain portions of the U.S. Gulf Coast. As a result of
these disruptions, the price of jet fuel increased significantly
and the availability of jet fuel supplies was diminished;
unpredicted increases to oil demand due to weather or the pace
of economic growth;
inventory levels of crude, refined products and natural
gas; and
other factors, such as the relative fluctuation in value between
the U.S. dollar and other major currencies and influence of
speculative positions on the futures exchanges.
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Expected Maturity Date
2009
2010
2011
2012
2013
Thereafter
Total
$
123
$
105
$
140
$
139
$
78
$
771
$
1,356
9.5
%
9.5
%
9.1
%
8.6
%
8.3
%
7.5
%
$
249
$
149
$
233
$
206
$
130
$
1,830
$
2,797
4.2
%
4.1
%
3.9
%
3.7
%
3.5
%
2.4
%
76
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Item 8A.
Consolidated
Financial Statements and Supplementary Data of US Airways Group,
Inc.
pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of US Airways Group;
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of US Airways Group are being
made only in accordance with authorizations of management and
directors of US Airways Group; and
provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of US
Airways Groups assets that could have a material effect on
the financial statements.
77
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US Airways Group, Inc.:
78
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US Airways Group, Inc.:
79
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2008
2007
2006
(In millions, except share and per share amounts)
$
8,183
$
8,135
$
7,966
2,879
2,698
2,744
144
138
153
912
729
694
12,118
11,700
11,557
3,618
2,630
2,518
356
(245
)
79
2,231
2,302
2,090
3,049
2,594
2,559
724
727
732
783
635
582
562
536
568
439
453
446
76
99
27
215
189
175
622
1,243
1,247
1,223
13,918
11,167
10,999
(1,800
)
533
558
83
172
153
(253
)
(273
)
(295
)
(240
)
2
(12
)
(410
)
(99
)
(154
)
(2,210
)
434
404
7
101
(2,210
)
427
303
1
$
(2,210
)
$
427
$
304
$
(22.06
)
$
4.66
$
3.50
0.01
$
(22.06
)
$
4.66
$
3.51
$
(22.06
)
$
4.52
$
3.32
0.01
$
(22.06
)
$
4.52
$
3.33
100,168
91,536
86,447
100,168
95,603
93,821
80
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81
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2008
2007
2006
(In millions)
$
(2,210
)
$
427
$
304
(1
)
240
212
198
(5
)
7
1
(8
)
(90
)
(1
)
(17
)
622
214
10
13
7
85
496
(187
)
70
(41
)
(40
)
(38
)
20
14
16
(2
)
34
32
34
7
18
7
17
(1
)
(184
)
(1
)
6
74
14
(35
)
49
(18
)
(25
)
(259
)
(52
)
22
4
(5
)
9
96
(11
)
(2
)
(134
)
(22
)
59
(67
)
(37
)
56
(10
)
(29
)
38
60
140
(86
)
(980
)
451
643
(929
)
(523
)
(232
)
(299
)
(2,591
)
(2,583
)
505
3,203
1,785
4
56
(74
)
200
128
17
4
7
(139
)
(80
)
(8
)
(915
)
269
(903
)
(734
)
(1,680
)
(1,187
)
1,586
1,798
1,419
(50
)
(9
)
(25
)
179
3
44
981
112
251
(914
)
832
(9
)
1,948
1,116
1,125
$
1,034
$
1,948
$
1,116
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Accumulated
Additional
Other
Common
Paid-In
Accumulated
Comprehensive
Treasury
Stock
Capital
Deficit
Income
Stock
Total
(In millions, except share amounts)
$
1
$
1,258
$
(826
)
$
$
(13
)
$
420
304
304
95
95
70
70
3
3
41
41
34
34
3
3
1
1,501
(522
)
3
(13
)
970
427
427
3
3
32
32
(48
)
(48
)
55
55
1
1,536
(95
)
10
(13
)
1,439
(2,210
)
(2,210
)
179
179
34
34
48
48
(2
)
(2
)
7
7
$
1
$
1,749
$
(2,307
)
$
65
$
(13
)
$
(505
)
83
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1.
Basis of
presentation and summary of significant accounting
policies
(a)
Nature
of Operations and Operating Environment
(b)
Basis
of Presentation
84
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(c)
Cash
and Cash Equivalents
2008
2007
$
1,024
$
1,858
10
90
$
1,034
$
1,948
(d)
Investments
in Marketable Securities
2008
2007
$
20
$
125
81
20
$
20
$
226
187
353
$
187
$
353
(e)
Restricted
Cash
85
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(f)
Materials
and Supplies, Net
(g)
Property
and Equipment
(h)
Income
Taxes
86
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(i)
Goodwill
and Other Intangibles, Net
87
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Goodwill
$
622
(622
)
$
2008
2007
$
495
$
478
52
52
(87
)
(62
)
$
460
$
468
88
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(j)
Other
Assets, Net
2008
2007
$
40
$
46
57
14
11
12
46
48
83
89
1
2
$
238
$
211
(k)
Frequent
Traveler Program
(l)
Derivative
Instruments
89
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(m)
Deferred
Gains and Credits, Net
(n)
Revenue
Recognition
90
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(o)
Maintenance
and Repair Costs
(p)
Selling
Expenses
(q)
Stock-based
Compensation
(r)
Express
Expenses
91
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Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
1,137
$
765
$
764
244
245
266
1,049
987
972
51
51
59
74
76
71
115
112
117
163
157
148
25
23
24
191
178
138
$
3,049
$
2,594
$
2,559
(s)
Variable
Interest Entities
(t)
Recent
Accounting Pronouncements
92
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2.
Special
items, net
Year Ended December 31,
2008
2007
2006
$
35
$
99
$
131
18
14
9
(90
)
(14
)
$
76
$
99
$
27
93
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(a)
In 2008, in connection with the effort to consolidate functions
and integrate the Companys organizations, procedures and
operations, the Company incurred $35 million of merger
related transition expenses. These expenses included
$12 million in uniform costs to transition employees to the
new US Airways uniforms; $5 million in applicable
employment tax expenses related to contractual benefits granted
to certain current and former employees as a result of the
merger; $6 million in compensation expenses for equity
awards granted in connection with the merger to retain key
employees through the integration period; $5 million of
aircraft livery costs; $4 million in professional and
technical fees related to the integration of the Companys
airline operations systems and $3 million in other expenses.
In 2007, the Company incurred $99 million of merger related
transition expenses. These expenses included $13 million in
training and related expenses; $19 million in compensation
expenses for equity awards granted in connection with the merger
to retain key employees through the integration period;
$20 million of aircraft livery costs; $37 million in
professional and technical fees related to the integration of
the Companys airline operations systems; $1 million
in employee moving expenses; $4 million related to
reservation system migration expenses and $5 million of
other expenses.
In 2006, the Company incurred $131 million of merger
related transition expenses. These items included
$6 million in training and related expenses;
$41 million in compensation expenses primarily for
severance, retention payments and equity awards granted in
connection with the merger to retain key employees through the
integration period; $17 million of aircraft livery costs;
$38 million in professional and technical fees, including
continuing professional fees associated with US Airways
bankruptcy proceedings and fees related to the integration of
the Companys airline operations systems; $7 million
of employee moving expenses; $11 million of net costs
associated with the integration of the AWA FlightFund and US
Airways Dividend Miles frequent traveler programs;
$2 million in merger related aircraft lease return expenses
and $9 million of other expenses.
(b)
In 2008, the Company recorded $18 million in non-cash
charges related to the decline in fair value of certain spare
parts associated with the Companys Boeing 737 aircraft
fleet. See Note 1(f) and (g) for further discussion of
these charges.
(c)
In 2008, the Company recorded $14 million in charges for
lease return costs and penalties related to certain Airbus
aircraft as a result of the planned fleet reductions.
(d)
In 2008, in connection with planned capacity reductions, the
Company recorded $9 million in charges related to
involuntary furloughs as well as terminations of non-union
administrative and management staff. Of this amount,
$6 million was paid out in 2008. The Company expects that
the remaining $3 million will be substantially paid by the
end of the first quarter of 2009.
(e)
In connection with the merger and the Airbus Memorandum of
Understanding (the Airbus MOU) executed between AVSA
S.A.R.L., an affiliate of Airbus S.A.S. (Airbus), US
Airways Group, US Airways and AWA, certain aircraft firm orders
were restructured. In connection with the Airbus MOU, US Airways
and AWA entered into two loan agreements with aggregate
commitments of up to $161 million and $89 million. On
March 31, 2006, the outstanding principal and accrued
interest on the $89 million loan was forgiven upon
repayment in full of the $161 million loan in accordance
with terms of the Airbus loans. As a result, in 2006, the
Company recognized a gain associated with the return of these
equipment deposits upon forgiveness of the loan totaling
$90 million, consisting of the $89 million in
equipment deposits and accrued interest of $1 million.
(f)
In 2006, the Company recognized $14 million in gains in
connection with the settlement of bankruptcy claims, which
includes $11 million related to a settlement with
Bombardier.
94
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3.
Earnings
(loss) per common share
Year Ended December 31,
2008
2007
2006
$
(2,210
)
$
427
$
303
1
$
(2,210
)
$
427
$
304
100,168
91,536
86,447
$
(22.06
)
$
4.66
$
3.50
0.01
$
(22.06
)
$
4.66
$
3.51
$
(2,210
)
$
427
$
303
1
(2,210
)
427
304
5
9
$
(2,210
)
$
432
$
313
100,168
91,536
86,447
1,017
2,058
3,050
5,316
100,168
95,603
93,821
$
(22.06
)
$
4.52
$
3.32
0.01
$
(22.06
)
$
4.52
$
3.33
95
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4.
Debt
December 31,
December 31,
2008
2007
$
1,184
$
1,600
1,674
802
540
576
47
47
39
41
32
32
1
3,516
3,099
200
207
74
74
72
57
29
29
10
10
45
637
170
4,153
3,269
(157
)
(121
)
(362
)
(117
)
$
3,634
$
3,031
(a)
On March 23, 2007, US Airways Group entered into a term
loan credit facility with Citicorp North America, Inc., as
administrative agent, and a syndicate of lenders pursuant to
which the Company borrowed an aggregate
96
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principal amount of $1.6 billion. US Airways, AWA and
certain other subsidiaries of the Company are guarantors of the
Citicorp credit facility.
The Citicorp credit facility bears interest at an index rate
plus an applicable index margin or, at the Companys
option, LIBOR plus an applicable LIBOR margin for interest
periods of one, two, three or six months. The applicable index
margin, subject to adjustment, is 1.00%, 1.25% or 1.50% if the
adjusted loan balance is less than $600 million, between
$600 million and $1 billion, or between
$1 billion and $1.6 billion, respectively. The
applicable LIBOR margin, subject to adjustment, is 2.00%, 2.25%
or 2.50% if the adjusted loan balance is less than
$600 million, between $600 million and
$1 billion, or between $1 billion and
$1.6 billion, respectively. In addition, interest on the
Citicorp credit facility may be adjusted based on the credit
rating for the Citicorp credit facility as follows: (i) if
the credit ratings of the Citicorp credit facility by
Moodys and S&P in effect as of the last day of the
most recently ended fiscal quarter are both at least one
subgrade better than the credit ratings in effect on
March 23, 2007, then (A) the applicable LIBOR margin
will be the lower of 2.25% and the rate otherwise applicable
based upon the adjusted Citicorp credit facility balance and
(B) the applicable index margin will be the lower of 1.25%
and the rate otherwise applicable based upon the Citicorp credit
facility principal balance, and (ii) if the credit ratings
of the Citicorp credit facility by Moodys and S&P in
effect as of the last day of the most recently ended fiscal
quarter are both at least two subgrades better than the credit
ratings in effect on March 23, 2007, then (A) the
applicable LIBOR margin will be 2.00% and (B) the
applicable index margin will be 1.00%. As of December 31,
2008, the interest rate on the Citicorp credit facility was
2.97% based on a 2.50% LIBOR margin.
The Citicorp credit facility matures on March 23, 2014, and
is repayable in seven annual installments with each of the first
six installments to be paid on each anniversary of the closing
date in an amount equal to 1% of the initial aggregate principal
amount of the loan and the final installment to be paid on the
maturity date in the amount of the full remaining balance of the
loan.
In addition, the Citicorp credit facility requires certain
mandatory prepayments upon the occurrence of certain events,
establishes certain financial covenants, including minimum cash
requirements and maintenance of certain minimum ratios, contains
customary affirmative covenants and negative covenants and
contains customary events of default. Prior to the amendment
discussed below, the Citicorp credit facility required the
Company to maintain consolidated unrestricted cash and cash
equivalents of not less than $1.25 billion, with not less
than $750 million (subject to partial reductions upon
certain reductions in the outstanding principal amount of the
loan) of that amount held in accounts subject to control
agreements, which would become restricted for use by the Company
if certain adverse events occur per the terms of the agreement.
On October 20, 2008, US Airways Group entered into an
amendment to the Citicorp credit facility. Pursuant to the
amendment, the Company repaid $400 million of indebtedness
under the credit facility, reducing the principal amount
outstanding under the credit facility to approximately
$1.18 billion as of December 31, 2008. The Citicorp
credit facility amendment also provides for a reduction in the
amount of unrestricted cash required to be held by the Company
from $1.25 billion to $850 million, and the Company
may, prior to September 30, 2009, further reduce that
minimum requirement to a minimum of $750 million on a
dollar-for-dollar basis for any additional repayments of up to
$100 million of indebtedness under the credit facility. The
Citicorp credit facility amendment also provides that the
Company may sell, finance or otherwise pledge assets that were
pledged as collateral under the credit facility, so long as the
Company prepays the indebtedness under the credit facility in an
amount equal to 75% of the appraised value of the collateral
sold or financed or assigned or 75% of the collateral value of
eligible accounts (determined in accordance with the credit
facility) sold or financed in such transaction. In addition, the
Citicorp credit facility amendment provides that the Company may
issue debt in the future with a silent second lien on the assets
pledged as collateral under the Citicorp credit facility.
(b)
The following are the significant secured financing agreements
entered into in 2008:
On February 1, 2008, US Airways entered into a loan
agreement for $145 million, secured by six Bombardier
CRJ-700 aircraft, three Boeing 757 aircraft and one spare
engine. The loan bears interest at a rate of LIBOR
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plus an applicable margin and is amortized over ten years. The
proceeds of the loan were used to repay $97 million of the
equipment notes previously secured by the six Bombardier CRJ-700
aircraft and three Boeing 757 aircraft.
On February 29, 2008, US Airways entered into a credit
facility agreement for $88 million to finance certain
pre-delivery payments required by US Airways purchase
agreements with Airbus. As of December 31, 2008, the
outstanding balance of this credit facility agreement is
$73 million. The remaining amounts under this facility will
be drawn as pre-delivery payments come due. The loan bears
interest at a rate of LIBOR plus an applicable margin and is
repaid as the related aircraft are delivered with a final
maturity date of the loan in November 2010.
In the second quarter of 2008, US Airways entered into facility
agreements with three lenders in the amounts of
$199 million, $198 million, and $119 million to
finance the acquisition of certain Airbus A320 family aircraft
deliveries starting in the second half of 2008. The loans bear
interest at a rate of LIBOR plus an applicable margin, contain
default and other covenants that are typical in the industry for
similar financings, and are amortized over twelve years with
balloon payments at maturity.
On October 20, 2008, US Airways entered into a
$270 million spare parts loan agreement and an
$85 million engines loan agreement. The proceeds of the
term loans made under these loan agreements were used to repay a
portion of the outstanding indebtedness pursuant to the Citicorp
credit facility amendment discussed in (a) above.
US Airways obligations under the spare parts loan
agreement are secured by a first priority security interest in
substantially all of US Airways rotable, repairable and
expendable aircraft spare parts. The obligations under the
engines loan agreement are secured by a first priority security
interest in 36 of US Airways aircraft engines. US Airways
has also agreed that other obligations owed by it or its
affiliates to the administrative agent for the loan agreements
or its affiliates (including the loans under these loan
agreements held by such administrative agent or its affiliates)
will be secured on a second priority basis by the collateral for
both loan agreements and certain other engines and aircraft.
The term loans under these loan agreements will bear interest at
a rate equal to LIBOR plus a margin per annum, subject to
adjustment in certain circumstances.
These loan agreements contain customary representations and
warranties, events of default and covenants for financings of
this nature, including obligations to maintain compliance with
covenants tied to the appraised value of US Airways spare
parts and the appraised value and maintenance condition of US
Airways engines, respectively.
The spare parts loan agreement matures on the sixth anniversary
of the closing date, and is subject to quarterly amortization in
amounts ranging from $8 million to $15 million. The
spare parts loan agreement may not be voluntarily prepaid during
the first three years of the term; however, the loan agreement
provided that in certain circumstances US Airways could prepay
$100 million of the loans under the agreement. The engines
loan agreement, which may not be voluntarily prepaid prior to
the third anniversary of the closing date, matures on the sixth
anniversary of the closing date, and is subject to amortization
in 24 equal quarterly installments.
On December 5, 2008, US Airways prepaid $100 million
of principal outstanding under the spare parts loan agreement.
In connection with this prepayment and pursuant to an amendment
to the spare parts loan agreement, subject to certain
conditions, US Airways obtained the right to incur up to
$100 million in new loans. The right to incur new loans
expires on April 1, 2009.
(c)
The equipment notes underlying the EETCs are the direct
obligations of US Airways and cover the financing of 19
aircraft. See Note 9(c) for further discussion.
(d)
In September 2005, US Airways entered into an agreement with
Republic to sell and leaseback certain of its commuter slots at
Ronald Reagan Washington National Airport and New York LaGuardia
Airport. US Airways continues to hold the right to repurchase
the slots anytime after the second anniversary of the slot
sale-leaseback
98
Table of Contents
transaction. These transactions were accounted for as secured
financings. Installments are due monthly through 2015. In
December 2006, Republic and US Airways modified terms of the
agreement to conform to subsequent regulatory changes at
LaGuardia, and the LaGuardia slots were returned to US Airways.
The need for a subsequent modification was fully contemplated in
the original agreement.
(e)
Capital lease obligations consist principally of certain airport
maintenance and facility leases which expire in 2018 and 2021.
(f)
On December 27, 2004, AWA raised additional capital by
financing its Phoenix maintenance facility and flight training
center. The flight training center was previously unencumbered,
and the maintenance facility became unencumbered earlier in 2004
when AWA refinanced its term loan. Using its leasehold interest
in these two facilities as collateral, AWA, through a wholly
owned subsidiary named FTCHP LLC, raised $31 million
through the issuance of senior secured discount notes. The notes
were issued by FTCHP at a discount pursuant to the terms of a
senior secured term loan agreement among AWA, FTCHP, Heritage
Bank SSB, as administrative agent, Citibank, N.A., as the
initial lender, and the other lenders from time to time party
thereto. Citibank, N.A. subsequently assigned all of its
interests in the notes to third party lenders.
AWA fully and unconditionally guaranteed the payment and
performance of FTCHPs obligations under the notes and the
loan agreement. The notes require aggregate principal payments
of $36 million with principal payments of $2 million
due on each of the first two anniversary dates and the remaining
principal amount due on the fifth anniversary date. The notes
may be prepaid in full at any time (subject to customary LIBOR
breakage costs) and in partial amounts of $2 million on the
third and fourth anniversary dates. The unpaid principal amount
of the notes bears interest based on LIBOR plus a margin subject
to adjustment based on a loan to collateral value ratio.
The loan agreement contains customary covenants applicable to
loans of this type, including obligations relating to the
preservation of the collateral and restrictions on the
activities of FTCHP. In addition, the loan agreement contains
events of default, including payment defaults, cross-defaults to
other debt of FTCHP, if any, breach of covenants, bankruptcy and
insolvency defaults and judgment defaults.
In connection with this financing, AWA sold all of its leasehold
interests in the maintenance facility and flight training center
to FTCHP and entered into subleases for the facilities with
FTCHP at lease rates expected to approximate the interest
payments due under the notes. In addition, AWA agreed to make
future capital contributions to FTCHP in amounts sufficient to
cover principal payments and other amounts owing pursuant to the
notes and the loan agreement. As part of the transfer of
substantially all of AWAs assets and liabilities to US
Airways in connection with the combination of all mainline
airline operations under one FAA operating certificate on
September 26, 2007, AWA assigned its subleases for the
facilities with FTCHP to US Airways. In addition, US Airways
assumed all of the obligations of AWA in connection with the
financing and joined the guarantee of the payment and
performance of FTCHPs obligations under the notes and the
loan agreement.
(g)
Effective as of October 20, 2008, US Airways Group entered
into an amendment to its co-branded credit card agreement with
Barclays Bank Delaware. The amendment provides for, among other
things, the pre-purchase of frequent flyer miles in an amount
totaling $200 million, which amount was paid by Barclays in
October 2008. The amendment also provides that so long as any
pre-purchased miles are outstanding, the Company will pay
interest to Barclays on the outstanding dollar amount of the
pre-purchased miles at the rate of LIBOR plus a margin. This
transaction was treated as a financing transaction for
accounting purposes using an effective interest rate
commensurate with the Companys credit rating.
The amendment to the co-branded credit card agreement provides
that Barclays will compensate us for fees earned using
pre-purchased miles. In addition, the amendment provides that
for each month that certain conditions are met, Barclays will
pre-purchase additional miles on a monthly basis in an amount
equal to the difference between $200 million and the amount
of unused miles then outstanding. The conditions include a
requirement that the Company maintains an unrestricted cash
balance, subject to certain circumstances, of at least
$1.5 billion each month, which was reduced to
$1.4 billion for January 2009 and $1.45 billion for
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February 2009, with the unrestricted cash balance in all cases
including certain fuel hedge collateral. The reductions
addressed the impact on the Companys unrestricted cash of
its obligations to post significant amounts of collateral with
its fuel hedging counterparties due to recent rapid declines in
fuel prices.
Prior to the second anniversary of the date of the amendment,
the $200 million cap on Barclays pre-purchase
obligation may be reduced if certain conditions are not met.
Commencing on that second anniversary, the $200 million cap
will be reduced over a period of approximately two years until
such time as no pre-purchased miles remain; however, the time of
reduction of the cap may be accelerated if certain conditions
are not met. The Company may repurchase any or all of the
pre-purchased miles at any time, from time to time, without
penalty.
Pursuant to the amendment to the co-branded credit card
agreement, the expiration date of the agreement was extended to
2017.
(h)
On October 20, 2008, US Airways and Airbus entered into
amendments to the A320 Family Aircraft Purchase Agreement, the
A330 Aircraft Purchase Agreement, and the A350 XWB Purchase
Agreement. In exchange for US Airways agreement to enter
into these amendments, Airbus advanced US Airways
$200 million in consideration of aircraft deliveries under
the various related purchase agreements. Under the terms of each
of the amendments, US Airways has agreed to maintain a level of
unrestricted cash in the same amount required by the Citicorp
credit facility. This transaction was treated as a financing
transaction for accounting purposes using an effective interest
rate commensurate with US Airways credit rating. There are
no stated interest payments.
(i)
On September 30, 2005, US Airways Group issued
$144 million aggregate principal amount of 7% Senior
Convertible Notes due 2020 (the 7% Senior Convertible
Notes) for proceeds, net of expenses, of approximately
$139 million. The 7% Senior Convertible Notes are US
Airways Groups senior unsecured obligations and rank
equally in right of payment to its other senior unsecured and
unsubordinated indebtedness and are effectively subordinated to
its secured indebtedness to the extent of the value of assets
securing such indebtedness. The 7% Senior Convertible Notes
are fully and unconditionally guaranteed, jointly and severally
and on a senior subordinated basis, by US Airways and AWA. The
guarantees are the guarantors unsecured obligations and
rank equally in right of payment to the other senior unsecured
and unsubordinated indebtedness of the guarantors and are
effectively subordinated to the guarantors secured
indebtedness to the extent of the value of assets securing such
indebtedness.
The 7% Senior Convertible Notes bear interest at the rate
of 7% per year payable in cash semiannually in arrears on March
30 and September 30 of each year, beginning March 30, 2006.
The 7% Senior Convertible Notes mature on
September 30, 2020.
Holders may convert, at any time on or prior to maturity or
redemption, any outstanding notes (or portions thereof) into
shares of US Airways Groups common stock, initially at a
conversion rate of 41.4508 shares of US Airways
Groups common stock per $1,000 principal amount of notes
(equivalent to an initial conversion price of approximately
$24.12 per share of US Airways Groups common stock). If a
holder elects to convert its notes in connection with certain
specified fundamental changes that occur prior to
October 5, 2015, the holder will be entitled to receive
additional shares of US Airways Groups common stock as a
make whole premium upon conversion. In lieu of delivery of
shares of US Airways Groups common stock upon conversion
of all or any portion of the notes, US Airways Group may elect
to pay holders surrendering notes for conversion, cash or a
combination of shares and cash.
Holders may require US Airways Group to purchase for cash or
shares or a combination thereof, at US Airways Groups
election, all or a portion of their 7% Senior Convertible
Notes on September 30, 2010 and September 30, 2015 at
a purchase price equal to 100% of the principal amount of the
7% Senior Convertible Notes to be repurchased plus accrued
and unpaid interest, if any, to the purchase date. In addition,
if US Airways Group experiences a specified fundamental change,
holders may require US Airways Group to purchase for cash,
shares or a combination thereof, at its election, all or a
portion of their 7% Senior Convertible Notes, subject to
specified exceptions, at a price equal to 100% of the principal
amount of the
100
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7% Senior Convertible Notes plus accrued and unpaid
interest, if any, to the purchase date. Prior to October 5,
2010, the 7% Senior Convertible Notes will not be
redeemable at US Airways Groups option. US Airways Group
may redeem all or a portion of the 7% Senior Convertible
Notes at any time on or after October 5, 2010, at a price
equal to 100% of the principal amount of the 7% Senior
Convertible Notes plus accrued and unpaid interest, if any, to
the redemption date if the closing price of US Airways
Groups common stock has exceeded 115% of the conversion
price for at least 20 trading days in the 30 consecutive trading
day period ending on the trading day before the date on which US
Airways Group mails the optional redemption notice.
In 2006, $70 million of the $144 million outstanding
principal amount was converted into 2,909,636 shares of
common stock. In connection with the conversion, the Company
paid a premium of $17 million to the holders of the
converted notes, which was recorded in other nonoperating
expenses.
(j)
In December 2004, deferred charges under US Airways
maintenance agreements with GE Engine Services, Inc. were
converted into an unsecured term note. Interest on the note
accrues at LIBOR plus 4%, and became payable beginning in
January 2008, with principal and interest payments due in
48 monthly installments through 2011. The outstanding
balance on the note at December 31, 2008 was
$39 million at an interest rate of 6.6%.
In October 2008, US Airways entered into a promissory note with
GE Engine Services, Inc. pursuant to which maintenance payments
up to $40 million due from October 2008 through March 2009
under US Airways Engine Service Agreement are deferred.
Interest on the note accrues at 14%, and becomes payable
beginning in April 2009, at which time principal and interest
payments are due in 12 monthly installments. The deferred
balance on the note at December 31, 2008 was
$33 million.
(k)
The industrial development revenue bonds are due April 2023.
Interest at 6.3% is payable semiannually on April 1 and
October 1. The bonds are subject to optional redemption
prior to the maturity date on or after April 1, 2008, in
whole or in part, on any interest payment date at the following
redemption prices: 102% on April 1 or October 1, 2008; 101%
on April 1 or October 1, 2009; and 100% on April 1,
2010 and thereafter.
(l)
In connection with US Airways Groups emergence from
bankruptcy in September 2005, it reached a settlement with the
Pension Benefit Guaranty Corporation (PBGC) related
to the termination of three of its defined benefit pension
plans. The settlement included the issuance of a
$10 million note which matures in 2012 and bears interest
at 6% payable annually in arrears.
$
372
254
373
345
208
2,601
$
4,153
101
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5.
Income
taxes
102
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Year Ended December 31,
2008
2007
2006
$
1
$
1
$
10
1
2
1
2
12
(1
)
77
(1
)
6
12
(1
)
5
89
$
$
7
$
101
Year Ended December 31,
2008
2007
2006
$
(773
)
$
152
$
142
229
13
(4
)
(30
)
30
10
573
(186
)
(67
)
1
1
10
(3
)
10
$
$
7
$
101
%
1.5
%
24.9
%
103
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2008
2007
$
546
$
282
22
22
95
19
25
18
352
347
144
153
38
38
199
16
(650
)
(77
)
771
818
563
519
144
146
47
59
31
31
5
84
790
839
19
21
$
19
$
21
104
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6.
Risk
management and financial instruments
(a)
Fuel
Price Risk
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
(140
)
$
(58
)
$
9
496
(187
)
70
$
356
$
(245
)
$
79
(b)
Credit
Risk
105
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106
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(c)
Interest
Rate Risk
7.
Fair
value measurements
Level 1.
Observable inputs such as quoted prices in active markets;
Level 2.
Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and
Level 3.
Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.
Quoted Prices in
Significant Other
Significant
Fair Value
Active Markets for
Observable
Unobservable
December 31,
Identical Assets
Inputs
Inputs
Valuation
2008
(Level 1)
(Level 2)
(Level 3)
Technique
$
187
$
$
$
187
(1
)
(375
)
(375
)
(2
)
(1)
The Company estimated the fair value of these auction rate
securities based on the following: (i) the underlying
structure of each security; (ii) the present value of
future principal and interest payments discounted at rates
considered to reflect current market conditions;
(iii) consideration of the probabilities of default,
passing a future auction, or repurchase at par for each period;
and (iv) estimates of the recovery rates in the event of
default for each security. These estimated fair values could
change significantly based on future market conditions. Refer to
Note 6(b) for further discussion of the Companys
investments in marketable securities.
107
Table of Contents
(2)
Since the Companys fuel hedging derivative instruments are
not traded on a market exchange, the fair values are determined
using valuation models which include assumptions about commodity
prices based on those observed in the underlying markets. The
fair value of fuel hedging derivatives is recorded in accounts
payable on the consolidated balance sheets. Refer to
Note 6(a) for further discussion of the Companys fuel
hedging derivatives.
Investments in
Marketable
Securities
(Noncurrent)
$
353
48
(214
)
$
187
108
Table of Contents
8.
Employee
pension and benefit plans
(a)
Defined
Benefit and Other Postretirement Benefit Plans
Defined Benefit Pension Plans(1)
Other Postretirement Benefits
Year Ended
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
2008
2007
2008
2007
$
46
$
45
$
$
(13
)
3
2
1
15
24
23
29
(2
)
(3
)
(38
)
(53
)
33
46
50
59
163
220
1
2
2
3
3
3
9
12
23
29
8
(7
)
(33
)
(48
)
(5
)
(3
)
(2
)
(38
)
(53
)
(4
)
59
50
122
163
(26
)
(4
)
(122
)
(163
)
6
$
(26
)
$
(4
)
$
(122
)
$
(157
)
$
15
$
(9
)
$
(80
)
$
(49
)
(1)
The Company maintains two defined benefit pension plans
sponsored by Piedmont. Piedmont closed one plan to new
participants in 2002 and froze the accrued benefits for the
other plan for all participants in 2003. The aggregate
accumulated benefit obligations, projected benefit obligations
and plan assets were $54 million, $59 million and
$33 million, as of December 31, 2008 and
$46 million, $50 million and $46 million, as of
December 31, 2007, respectively.
109
Table of Contents
(2)
For the year ended December 31, 2007, the Company
recognized a $5 million curtailment gain related to the
elimination of a social security supplemental benefit as a
result of the federally mandated change in the pilot retirement
age from age 60 to 65.
Defined Benefit Pension Plans
Other Postretirement Benefits
Year Ended
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
2008
2007
2008
2007
5.5
%
6
%
5.98
%
5.94
%
4
%
4
%
1% Increase
1% Decrease
$
1
$
(1
)
6
(5
)
Defined Benefit Pension Plans
Other Postretirement Benefits
Year Ended
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
2008
2007
2008
2007
6
%
5.75
%
5.94
%
5.67
%
8
%
8
%
4
%
4
%
110
Table of Contents
Defined Benefit Pension Plans
Other Postretirement Benefits
Year Ended
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
December 31,
2008
2007
2008
2007
$
1
$
2
$
2
$
3
3
3
9
12
(4
)
(3
)
(2
)
$
$
2
$
9
$
15
Other
Postretirement
Defined Benefit
Benefits before
Pension Plans
Medicare Subsidy
Medicare Subsidy
$
2
$
14
$
2
12
2
12
2
11
2
12
13
60
2
2008
2007
69
%
69
%
30
30
1
1
100
%
100
%
(b)
Defined
Contribution Plans
111
Table of Contents
(c)
Postemployment
Benefits
(d)
Profit
Sharing Plans
9.
Commitments
and contingencies
(a)
Commitments
to Purchase Flight Equipment and Maintenance
Services
112
Table of Contents
(b)
Leases
$
1,075
976
851
770
629
3,227
$
7,528
(c)
Off-balance
Sheet Arrangements
113
Table of Contents
(d)
Regional
Jet Capacity Purchase Agreements
114
Table of Contents
(e)
Legal
Proceedings
(f)
Guarantees
and Indemnifications
115
Table of Contents
10.
Other
comprehensive income (loss)
Year Ended December 31,
2008
2007
2006
$
(2,210
)
$
427
$
304
(48
)
48
3
7
55
$
(2,155
)
$
434
$
307
December 31,
December 31,
2008
2007
$
$
(48
)
3
3
62
55
$
65
$
10
116
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11.
Supplemental
cash flow information
Year Ended December 31,
2008
2007
2006
$
7
$
$
33
48
70
95
4
3
216
248
264
1
4
12
12.
Related
party transactions
13.
Operating
segments and related disclosures
117
Table of Contents
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
9,659
$
9,582
$
9,397
2,459
2,118
2,160
$
12,118
$
11,700
$
11,557
14.
Stockholders
equity
15.
Stock-based
compensation
118
Table of Contents
Weighted
Number of
Average Grant-
Shares
Date Fair Value
687
$
26.17
254
38.55
(75
)
42.38
(52
)
24.85
814
$
28.63
242
41.51
(446
)
29.85
(18
)
31.26
592
$
32.91
535
9.02
(390
)
29.07
(32
)
23.15
705
$
17.36
$
19
7.52
19
$
7.52
119
Table of Contents
Weighted
Average
Stock
Weighted
Remaining
Options
Average
Contractual Term
Aggregate
and SARs
Exercise Price
(years)
Intrinsic Value
(In millions)
1,267
$
38.28
(455
)
23.64
(62
)
50.93
750
$
46.10
(30
)
40.93
(75
)
46.38
645
$
46.30
(2
)
9.21
(244
)
55.35
399
$
40.96
1.04
$
399
$
40.96
1.04
$
399
$
40.96
1.04
$
2,048
$
16.98
(1,250
)
16.12
798
$
18.33
(36
)
14.36
762
$
18.52
(2
)
6.42
(23
)
25.08
737
$
18.34
4.95
$
735
$
18.33
4.95
$
686
$
18.15
4.83
$
120
Table of Contents
Weighted
Average
Stock
Weighted
Remaining
Options
Average
Contractual Term
Aggregate
and SARs
Exercise Price
(years)
Intrinsic Value
(In millions)
1,973
$
23.15
1,310
40.30
(701
)
24.49
(87
)
30.34
2,495
$
31.53
1,123
42.23
(92
)
29.74
(93
)
35.00
(63
)
37.48
3,370
$
34.96
1,959
9.11
(5
)
8.84
(200
)
30.18
(218
)
32.76
4,906
$
24.93
8.02
$
4,720
$
25.28
7.96
$
2,100
$
31.94
7.04
$
$
2,389
6.64
(56
)
6.70
2,333
$
6.64
6.63
$
3
2,104
$
6.64
6.63
$
2
5
$
6.70
6.59
$
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
3.28
$
16.57
$
16.77
2.5
%
4.5
%
4.8
%
3.0 years
3.0 years
2.9 years
62
%
52
%
57
%
Table of Contents
January 31,
January 31,
January 31,
2008
2007
2006
$
3.02
$
18.02
$
17.11
2.2
%
4.9
%
4.4
%
2.0 years
2.0 years
5.0 years
55
%
53
%
70
%
122
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16.
Valuation
and qualifying accounts (in millions)
Balance at
Balance at
Beginning
End
of Period
Additions
Deductions
of Period
$
4
$
10
$
8
$
6
$
8
$
9
$
13
$
4
$
10
$
7
$
9
$
8
$
40
$
21
$
10
$
51
$
30
$
12
$
2
$
40
$
24
$
10
$
4
$
30
$
77
$
573
$
$
650
$
263
$
$
186
$
77
$
446
$
$
183
$
263
17.
Selected
quarterly financial information (unaudited)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
$
2,840
$
3,257
$
3,261
$
2,761
3,036
3,793
3,950
3,139
(196
)
(536
)
(689
)
(378
)
(40
)
(31
)
(173
)
(166
)
3
(3
)
(236
)
(567
)
(865
)
(541
)
$
(2.56
)
$
(6.16
)
$
(8.45
)
$
(4.74
)
$
(2.56
)
$
(6.16
)
$
(8.45
)
$
(4.74
)
92,023
92,137
102,406
114,106
92,023
92,137
102,406
114,106
$
2,732
$
3,155
$
3,036
$
2,776
2,616
2,866
2,834
2,850
116
289
202
(74
)
(47
)
(18
)
(21
)
(13
)
3
8
4
(8
)
66
263
177
(79
)
$
0.73
$
2.88
$
1.93
$
(0.87
)
$
0.70
$
2.77
$
1.87
$
(0.87
)
91,363
91,477
91,542
91,761
96,223
95,613
95,492
91,761
123
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18.
Subsequent
events
124
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Item 8B.
Consolidated
Financial Statements and Supplementary Data of US Airways,
Inc.
pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of US Airways;
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of US Airways are being made only
in accordance with authorizations of management and directors of
US Airways; and
provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of US
Airways assets that could have a material effect on the
financial statements.
125
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126
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127
Table of Contents
2008
2007
2006
(In millions)
$
8,183
$
8,135
$
7,966
2,879
2,698
2,744
144
138
153
1,038
842
829
12,244
11,813
11,692
3,618
2,630
2,518
356
(245
)
79
2,231
2,302
2,090
3,139
2,727
2,670
724
727
732
783
635
582
562
536
568
439
453
446
76
99
38
224
198
184
622
1,243
1,227
1,228
14,017
11,289
11,135
(1,773
)
524
557
83
172
153
(218
)
(229
)
(268
)
(240
)
18
4
(375
)
(39
)
(111
)
(2,148
)
485
446
7
98
(2,148
)
478
348
1
$
(2,148
)
$
478
$
349
128
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129
Table of Contents
2008
2007
2006
(In millions)
$
(2,148
)
$
478
$
349
(1
)
224
198
183
7
(1
)
(8
)
(90
)
(1
)
(17
)
622
214
10
13
7
85
496
(187
)
70
(40
)
(40
)
(38
)
15
13
13
(2
)
6
5
(184
)
(1
)
6
68
17
(36
)
35
(2
)
(16
)
(270
)
(55
)
37
3
(5
)
8
114
(26
)
16
(31
)
(28
)
(134
)
(22
)
59
(67
)
(36
)
49
(16
)
(22
)
36
59
151
(82
)
(1,025
)
433
652
(902
)
(486
)
(222
)
(299
)
(2,591
)
(2,583
)
505
3,203
1,785
4
56
(74
)
200
128
16
4
7
(139
)
(80
)
(8
)
(889
)
306
(893
)
(318
)
(105
)
(100
)
1,386
198
92
(17
)
(3
)
(3
)
(51
)
247
1,000
90
236
(914
)
829
(5
)
1,940
1,111
1,116
$
1,026
$
1,940
$
1,111
130
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Additional
Retained
Accumulated Other
Common
Paid-In
Earnings
Comprehensive
Stock
Capital
(Deficit)
Income (Loss)
Total
(In millions)
$
$
11
$
(821
)
$
$
(810
)
349
349
11
(472
)
(461
)
478
478
1,834
1,834
(48
)
(48
)
47
47
1,845
6
(1
)
1,850
(2,148
)
(2,148
)
48
48
(2
)
(2
)
31
31
$
$
1,845
$
(2,144
)
$
78
$
(221
)
131
Table of Contents
1.
Basis of
presentation and summary of significant accounting
policies
(a)
Nature
of Operations and Operating Environment
(b)
Basis
of Presentation
132
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(c)
Cash
and Cash Equivalents
2008
2007
$
1,016
$
1,850
10
90
$
1,026
$
1,940
(d)
Investments
in Marketable Securities
133
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2008
2007
$
20
$
125
81
20
$
20
$
226
187
353
$
187
$
353
(e)
Restricted
Cash
(f)
Materials
and Supplies, Net
(g)
Property
and Equipment
134
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(h)
Income
Taxes
(i)
Goodwill
and Other Intangibles, Net
135
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Goodwill
$
622
(622
)
$
2008
2007
$
452
$
435
52
52
(81
)
(58
)
$
423
$
429
136
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(j)
Other
Assets, Net
2008
2007
$
40
$
46
19
7
11
12
46
48
83
89
$
199
$
202
(k)
Frequent
Traveler Program
137
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(l)
Derivative
Instruments
(m)
Deferred
Gains and Credits, Net
138
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(n)
Revenue
Recognition
(o)
Maintenance
and Repair Costs
(p)
Selling
Expenses
139
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(q)
Stock-based
Compensation
(r)
Express
Expenses
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
1,137
$
765
$
764
21
20
36
1,621
1,599
1,551
9
2
96
93
97
163
157
148
101
93
63
$
3,139
$
2,727
$
2,670
(s)
Variable
Interest Entities
(t)
Recent
Accounting Pronouncements
140
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2.
Special
items, net
Year Ended December 31,
2008
2007
2006
$
35
$
99
$
131
18
14
9
(90
)
(3
)
$
76
$
99
$
38
141
Table of Contents
(a)
In 2008, in connection with the effort to consolidate functions
and integrate organizations, procedures and operations with AWA,
US Airways incurred $35 million of merger related
transition expenses. These expenses included $12 million in
uniform costs to transition employees to the new US Airways
uniforms; $5 million in applicable employment tax expenses
related to contractual benefits granted to certain current and
former employees as a result of the merger; $6 million in
compensation expenses for equity awards granted in connection
with the merger to retain key employees through the integration
period; $5 million of aircraft livery costs;
$4 million in professional and technical fees related to
the integration of airline operations systems and
$3 million in other expenses.
In 2007, US Airways incurred $99 million of merger related
transition expenses. These expenses included $13 million in
training and related expenses; $19 million in compensation
expenses for equity awards granted in connection with the merger
to retain key employees through the integration period;
$20 million of aircraft livery costs; $37 million in
professional and technical fees related to the integration of
airline operations systems; $1 million in employee moving
expenses; $4 million related to reservation system
migration expenses and $5 million of other expenses.
In 2006, US Airways incurred $131 million of merger related
transition expenses. These items included $6 million in
training and related expenses; $41 million in compensation
expenses primarily for severance, retention payments and equity
awards granted in connection with the merger to retain key
employees through the integration period; $17 million of
aircraft livery costs; $38 million in professional and
technical fees, including continuing professional fees
associated with US Airways bankruptcy proceedings and fees
related to the integration of airline operations systems;
$7 million of employee moving expenses; $11 million of
net costs associated with the integration of the AWA FlightFund
and US Airways Dividend Miles frequent traveler programs;
$2 million in merger related aircraft lease return expenses
and $9 million of other expenses.
(b)
In 2008, US Airways recorded $18 million in non-cash
charges related to the decline in fair value of certain spare
parts associated with its Boeing 737 aircraft fleet. See
Note 1(f) and (g) for further discussion of these
charges.
(c)
In 2008, US Airways recorded $14 million in charges for
lease return costs and penalties related to certain Airbus
aircraft as a result of the planned fleet reductions.
(d)
In 2008, in connection with planned capacity reductions, US
Airways recorded $9 million in charges related to
involuntary furloughs as well as terminations of non-union
administrative and management staff. Of this amount,
$6 million was paid out in 2008. US Airways expects that
the remaining $3 million will be substantially paid by the
end of the first quarter of 2009.
(e)
In connection with the merger and the Airbus Memorandum of
Understanding (the Airbus MOU) executed between AVSA
S.A.R.L., an affiliate of Airbus S.A.S. (Airbus), US
Airways Group, US Airways and AWA, certain aircraft firm orders
were restructured. In connection with the Airbus MOU, US Airways
and AWA entered into two loan agreements with aggregate
commitments of up to $161 million and $89 million. On
March 31, 2006, the outstanding principal and accrued
interest on the $89 million loan was forgiven upon
repayment in full of the $161 million loan in accordance
with terms of the Airbus loans. As a result, in 2006, US Airways
recognized a gain associated with the return of these equipment
deposits upon forgiveness of the loan totaling $90 million,
consisting of the $89 million in equipment deposits and
accrued interest of $1 million.
(f)
In 2006, US Airways recognized $3 million in gains in
connection with the settlement of bankruptcy claims.
142
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3.
Debt
December 31,
December 31,
2008
2007
$
1,674
$
802
540
576
47
47
39
41
32
32
1
2,332
1,499
207
72
57
29
29
10
10
45
363
96
2,695
1,595
(113
)
(121
)
(346
)
(101
)
$
2,236
$
1,373
(a)
The following are the significant secured financing agreements
entered into in 2008:
On February 1, 2008, US Airways entered into a loan
agreement for $145 million, secured by six Bombardier
CRJ-700 aircraft, three Boeing 757 aircraft and one spare
engine. The loan bears interest at a rate of LIBOR plus an
applicable margin and is amortized over ten years. The proceeds
of the loan were used to repay $97 million of the equipment
notes previously secured by the six Bombardier CRJ-700 aircraft
and three Boeing 757 aircraft.
On February 29, 2008, US Airways entered into a credit
facility agreement for $88 million to finance certain
pre-delivery payments required by US Airways purchase
agreements with Airbus. As of December 31, 2008, the
outstanding balance of this credit facility agreement is
$73 million. The remaining amounts under this facility will
be drawn as pre-delivery payments come due. The loan bears
interest at a rate of LIBOR plus an applicable margin and is
repaid as the related aircraft are delivered with a final
maturity date of the loan in November 2010.
In the second quarter of 2008, US Airways entered into facility
agreements with three lenders in the amounts of
$199 million, $198 million, and $119 million to
finance the acquisition of certain Airbus A320 family aircraft
deliveries starting in the second half of 2008. The loans bear
interest at a rate of LIBOR plus an applicable
143
Table of Contents
margin, contain default and other covenants that are typical in
the industry for similar financings, and are amortized over
twelve years with balloon payments at maturity.
On October 20, 2008, US Airways entered into a
$270 million spare parts loan agreement and an
$85 million engines loan agreement. The proceeds of the
term loans made under these loan agreements were used to repay a
portion of the outstanding indebtedness of US Airways Group
under its Citicorp credit facility.
US Airways obligations under the spare parts loan
agreement are secured by a first priority security interest in
substantially all of US Airways rotable, repairable and
expendable aircraft spare parts. The obligations under the
engines loan agreement are secured by a first priority security
interest in 36 of US Airways aircraft engines. US Airways
has also agreed that other obligations owed by it or its
affiliates to the administrative agent for the loan agreements
or its affiliates (including the loans under these loan
agreements held by such administrative agent or its affiliates)
will be secured on a second priority basis by the collateral for
both loan agreements and certain other engines and aircraft.
The term loans under these loan agreements will bear interest at
a rate equal to LIBOR plus a margin per annum, subject to
adjustment in certain circumstances.
These loan agreements contain customary representations and
warranties, events of default and covenants for financings of
this nature, including obligations to maintain compliance with
covenants tied to the appraised value of US Airways spare
parts and the appraised value and maintenance condition of US
Airways engines, respectively.
The spare parts loan agreement matures on the sixth anniversary
of the closing date, and is subject to quarterly amortization in
amounts ranging from $8 million to $15 million. The
spare parts loan agreement may not be voluntarily prepaid during
the first three years of the term; however, the loan agreement
provided that in certain circumstances US Airways could prepay
$100 million of the loans under the agreement. The engines
loan agreement, which may not be voluntarily prepaid prior to
the third anniversary of the closing date, matures on the sixth
anniversary of the closing date, and is subject to amortization
in 24 equal quarterly installments.
On December 5, 2008, US Airways prepaid $100 million
of principal outstanding under the spare parts loan agreement.
In connection with this prepayment and pursuant to an amendment
to the spare parts loan agreement, subject to certain
conditions, US Airways obtained the right to incur up to
$100 million in new loans. The right to incur new loans
expires on April 1, 2009.
(b)
The equipment notes underlying the EETCs are the direct
obligations of US Airways and cover the financing of 19
aircraft. See Note 8(c) for further discussion.
(c)
In September 2005, US Airways entered into an agreement with
Republic to sell and leaseback certain of its commuter slots at
Ronald Reagan Washington National Airport and New York LaGuardia
Airport. US Airways continues to hold the right to repurchase
the slots anytime after the second anniversary of the slot
sale-leaseback transaction. These transactions were accounted
for as secured financings. Installments are due monthly through
2015. In December 2006, Republic and US Airways modified terms
of the agreement to conform to subsequent regulatory changes at
LaGuardia, and the LaGuardia slots were returned to US Airways.
The need for a subsequent modification was fully contemplated in
the original agreement.
(d)
Capital lease obligations consist principally of certain airport
maintenance and facility leases which expire in 2018 and 2021.
(e)
On December 27, 2004, AWA raised additional capital by
financing its Phoenix maintenance facility and flight training
center. The flight training center was previously unencumbered,
and the maintenance facility became unencumbered earlier in 2004
when AWA refinanced its term loan. Using its leasehold interest
in these two facilities as collateral, AWA, through a wholly
owned subsidiary named FTCHP LLC, raised $31 million
through the issuance of senior secured discount notes. The notes
were issued by FTCHP at a discount pursuant to the terms of a
senior secured term loan agreement among AWA, FTCHP, Heritage
Bank SSB, as administrative agent, Citibank, N.A., as the
initial lender, and the other lenders from time to time party
thereto. Citibank, N.A. subsequently assigned all of its
interests in the notes to third party lenders.
144
Table of Contents
AWA fully and unconditionally guaranteed the payment and
performance of FTCHPs obligations under the notes and the
loan agreement. The notes require aggregate principal payments
of $36 million with principal payments of $2 million
due on each of the first two anniversary dates and the remaining
principal amount due on the fifth anniversary date. The notes
may be prepaid in full at any time (subject to customary LIBOR
breakage costs) and in partial amounts of $2 million on the
third and fourth anniversary dates. The unpaid principal amount
of the notes bears interest based on LIBOR plus a margin subject
to adjustment based on a loan to collateral value ratio.
The loan agreement contains customary covenants applicable to
loans of this type, including obligations relating to the
preservation of the collateral and restrictions on the
activities of FTCHP. In addition, the loan agreement contains
events of default, including payment defaults, cross-defaults to
other debt of FTCHP, if any, breach of covenants, bankruptcy and
insolvency defaults and judgment defaults.
In connection with this financing, AWA sold all of its leasehold
interests in the maintenance facility and flight training center
to FTCHP and entered into subleases for the facilities with
FTCHP at lease rates expected to approximate the interest
payments due under the notes. In addition, AWA agreed to make
future capital contributions to FTCHP in amounts sufficient to
cover principal payments and other amounts owing pursuant to the
notes and the loan agreement. As part of the transfer of
substantially all of AWAs assets and liabilities to US
Airways in connection with the combination of all mainline
airline operations under one FAA operating certificate on
September 26, 2007, AWA assigned its subleases for the
facilities with FTCHP to US Airways. In addition, US Airways
assumed all of the obligations of AWA in connection with the
financing and joined the guarantee of the payment and
performance of FTCHPs obligations under the notes and the
loan agreement.
(f)
On October 20, 2008, US Airways and Airbus entered into
amendments to the A320 Family Aircraft Purchase Agreement, the
A330 Aircraft Purchase Agreement, and the A350 XWB Purchase
Agreement. In exchange for US Airways agreement to enter
into these amendments, Airbus advanced US Airways
$200 million in consideration of aircraft deliveries under
the various related purchase agreements. Under the terms of each
of the amendments, US Airways has agreed to maintain a level of
unrestricted cash in the same amount required by the US Airways
Group Citicorp credit facility. This transaction was treated as
a financing transaction for accounting purposes with an
effective interest rate commensurate with US Airways
credit rating. There are no stated interest payments.
(g)
In December 2004, deferred charges under US Airways
maintenance agreements with GE Engine Services, Inc. were
converted into an unsecured term note. Interest on the note
accrues at LIBOR plus 4%, and became payable beginning in
January 2008, with principal and interest payments due in
48 monthly installments through 2011. The outstanding
balance on the note at December 31, 2008 was
$39 million at an interest rate of 6.6%.
In October 2008, US Airways entered into a promissory note with
GE Engine Services, Inc. pursuant to which maintenance payments
up to $40 million due from October 2008 through March 2009
under US Airways Engine Service Agreement are deferred.
Interest on the note accrues at 14%, and becomes payable
beginning in April 2009, at which time principal and interest
payments are due in 12 monthly installments. The deferred
balance on the note at December 31, 2008 was
$33 million.
(h)
The industrial development revenue bonds are due April 2023.
Interest at 6.3% is payable semiannually on April 1 and
October 1. The bonds are subject to optional redemption
prior to the maturity date on or after April 1, 2008, in
whole or in part, on any interest payment date at the following
redemption prices: 102% on April 1 or October 1, 2008; 101%
on April 1 or October 1, 2009; and 100% on April 1,
2010 and thereafter.
(i)
In connection with US Airways emergence from bankruptcy in
September 2005, it reached a settlement with the Pension Benefit
Guaranty Corporation (PBGC) related to the
termination of three of its defined benefit pension plans. The
settlement included the issuance of a $10 million note
which matures in 2012 and bears interest at 6% payable annually
in arrears.
145
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$
356
221
257
246
192
1,423
$
2,695
4.
Income
taxes
146
Table of Contents
Year Ended December 31,
2008
2007
2006
$
1
$
1
$
10
1
2
1
2
12
(1
)
77
(1
)
6
9
(1
)
5
86
$
$
7
$
98
Year Ended December 31,
2008
2007
2006
$
(752
)
$
170
$
155
229
12
(5
)
(38
)
7
10
560
(180
)
(73
)
1
1
10
(3
)
1
$
$
7
$
98
%
1.4
%
22.1
%
147
Table of Contents
2008
2007
$
515
$
263
21
21
95
19
25
18
338
335
144
153
38
38
197
15
(643
)
(83
)
730
779
522
478
144
146
47
59
31
31
4
84
748
798
18
19
$
18
$
19
148
Table of Contents
5.
Risk
management and financial instruments
(a)
Fuel
Price Risk
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
(140
)
$
(58
)
$
9
496
(187
)
70
$
356
$
(245
)
$
79
(b)
Credit
Risk
149
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150
Table of Contents
(c)
Interest
Rate Risk
6.
Fair
value measurements
Level 1.
Observable inputs such as quoted prices in active markets;
Level 2.
Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and
Level 3.
Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.
Quoted Prices in
Significant Other
Significant
Fair Value
Active Markets for
Observable
Unobservable
December 31,
Identical Assets
Inputs
Inputs
Valuation
2008
(Level 1)
(Level 2)
(Level 3)
Technique
$
187
$
$
$
187
(1
)
(375
)
(375
)
(2
)
(1)
US Airways estimated the fair value of these auction rate
securities based on the following: (i) the underlying
structure of each security; (ii) the present value of
future principal and interest payments discounted at rates
considered to reflect current market conditions;
(iii) consideration of the probabilities of default,
passing a future auction, or repurchase at par for each period;
and (iv) estimates of the recovery rates in the event of
default for each security. These estimated fair values could
change significantly based on future market conditions. Refer to
Note 5(b) for further discussion of US Airways
investments in marketable securities.
(2)
Since US Airways fuel hedging derivative instruments are
not traded on a market exchange, the fair values are determined
using valuation models which include assumptions about commodity
prices based on those observed in the underlying markets. The
fair value of fuel hedging derivatives is recorded in accounts
payable
151
Table of Contents
on the consolidated balance sheets. Refer to Note 5(a) for
further discussion of US Airways fuel hedging derivatives.
Investments in
Marketable
Securities
(Noncurrent)
$
353
48
(214
)
$
187
7.
Employee
pension and benefit plans
(a)
Other
Postretirement Benefits Plan
Year Ended
Year Ended
December 31,
December 31,
2008
2007
$
$
15
23
22
28
(37
)
(51
)
162
217
2
3
9
12
22
28
(33
)
(47
)
(37
)
(51
)
(4
)
121
162
(121
)
(162
)
6
$
(121
)
$
(156
)
$
78
$
47
152
Table of Contents
Year Ended
Year Ended
December 31,
December 31,
2008
2007
5.98
%
5.94
%
1% Increase
1% Decrease
$
1
$
(1
)
6
(5
)
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
5.94
%
5.67
%
5.3
%
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
2
$
3
$
3
9
12
12
(2
)
$
9
$
15
$
15
153
Table of Contents
Other
Postretirement
Benefits before
Medicare Subsidy
Medicare Subsidy
$
14
$
12
12
11
12
60
2
(b)
Defined
Contribution Plans
(c)
Postemployment
Benefits
(d)
Profit
Sharing Plans
8.
Commitments
and contingencies
(a)
Commitments
to Purchase Flight Equipment and Maintenance
Services
154
Table of Contents
(b)
Leases
155
Table of Contents
$
1,065
974
850
769
628
3,227
7,513
(860
)
$
6,653
2008
2007
$
286
$
286
(33
)
(23
)
$
253
$
263
(c)
Off-Balance
Sheet Arrangements
156
Table of Contents
(d)
Regional
Jet Capacity Purchase Agreements
(e)
Legal
Proceedings
157
Table of Contents
(f)
Guarantees
and Indemnifications
9.
Other
comprehensive income (loss)
Year Ended December 31,
2008
2007
2006
$
(2,148
)
$
478
$
349
(48
)
48
31
47
$
(2,069
)
$
477
$
349
158
Table of Contents
December 31,
December 31,
2008
2007
$
$
(48
)
78
47
$
78
$
(1
)
10.
Supplemental
cash flow information
Year Ended December 31,
2008
2007
2006
$
7
$
$
33
1,834
325
48
981
95
64
4
3
124
122
170
4
12
11.
Related
party transactions
December 31,
2008
2007
$
949
$
986
36
81
$
985
$
1,067
159
Table of Contents
(a)
Parent
Company
(b)
Subsidiaries
of US Airways Group
12.
Operating
segments and related disclosures
160
Table of Contents
Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
9,760
$
9,675
$
9,504
2,484
2,138
2,188
$
12,244
$
11,813
$
11,692
13.
Stock-based
compensation
161
Table of Contents
Weighted
Number of
Average Grant-
Shares
Date Fair Value
687
$
26.17
254
38.55
(75
)
42.38
(52
)
24.85
814
$
28.63
242
41.51
(446
)
29.85
(18
)
31.26
592
$
32.91
535
9.02
(390
)
29.07
(32
)
23.15
705
$
17.36
$
19
7.52
19
$
7.52
162
Table of Contents
Weighted
Average
Stock
Weighted
Remaining
Options
Average
Contractual Term
Aggregate
and SARs
Exercise Price
(Years)
Intrinsic Value
(In millions)
1,267
$
38.28
(455
)
23.64
(62
)
50.93
750
$
46.10
(30
)
40.93
(75
)
46.38
645
$
46.30
(2
)
9.21
(244
)
55.35
399
$
40.96
1.04
$
399
$
40.96
1.04
$
399
$
40.96
1.04
$
2,048
$
16.98
(1,250
)
16.12
798
$
18.33
(36
)
14.36
762
$
18.52
(2
)
6.42
(23
)
25.08
737
$
18.34
4.95
$
735
$
18.33
4.95
$
686
$
18.15
4.83
$
163
Table of Contents
Weighted
Average
Stock
Weighted
Remaining
Options
Average
Contractual Term
Aggregate
and SARs
Exercise Price
(Years)
Intrinsic Value
(In millions)
1,973
$
23.15
1,310
40.30
(701
)
24.49
(87
)
30.34
2,495
$
31.53
1,123
42.23
(92
)
29.74
(93
)
35.00
(63
)
37.48
3,370
$
34.96
1,959
9.11
(5
)
8.84
(200
)
30.18
(218
)
32.76
4,906
$
24.93
8.02
$
4,720
$
25.28
7.96
$
2,100
$
31.94
7.04
$
$
2,389
6.64
(56
)
6.70
2,333
$
6.64
6.63
$
3
2,104
$
6.64
6.63
$
2
5
$
6.70
6.59
$
Table of Contents
Year Ended
December 31,
December 31,
December 31,
2008
2007
2006
$
3.28
$
16.57
$
16.77
2.5
%
4.5
%
4.8
%
3.0 years
3.0 years
2.9 years
62
%
52
%
57
%
January 31,
January 31,
January 31,
2008
2007
2006
$
3.02
$
18.02
$
17.11
2.2
%
4.9
%
4.4
%
2.0 years
2.0 years
5.0 years
55
%
53
%
70
%
165
Table of Contents
14.
Valuation
and qualifying accounts (in millions)
Balance at
Balance
Beginning
at End
of Period
Additions
Deductions
of Period
$
4
$
10
$
8
$
6
$
8
$
9
$
13
$
4
$
10
$
7
$
9
$
8
$
38
$
18
$
8
$
48
$
29
$
10
$
1
$
38
$
24
$
9
$
4
$
29
$
83
$
560
$
$
643
$
263
$
$
180
$
83
$
440
$
$
177
$
263
15.
Selected
quarterly financial information (unaudited)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
$
2,867
$
3,287
$
3,293
$
2,797
3,060
3,825
3,981
3,151
(193
)
(538
)
(688
)
(354
)
(31
)
(21
)
(164
)
(159
)
3
(3
)
(224
)
(559
)
(855
)
(510
)
$
2,761
$
3,185
$
3,065
$
2,802
2,631
2,890
2,863
2,905
130
295
202
(103
)
(23
)
(4
)
(10
)
(2
)
3
8
5
(9
)
104
283
187
(96
)
16.
Subsequent
events
166
Table of Contents
167
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
Item 9B.
Other
Information
168
Table of Contents
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions and Director
Independence
Item 14.
Principal
Accountant Fees and Services
169
Table of Contents
Item 15.
Exhibits
and Financial Statement Schedules
Consolidated Statements of Operations for the years ended
December 31, 2008, 2007 and 2006
Consolidated Balance Sheets as of December 31, 2008 and 2007
Consolidated Statements of Cash Flows for the years ended
December 31, 2008, 2007 and 2006
Consolidated Statements of Stockholders Equity (Deficit)
for the years ended December 31, 2008, 2007 and 2006
Notes to Consolidated Financial Statements
Consolidated Statements of Operations for the years ended
December 31, 2008, 2007 and 2006
Consolidated Balance Sheets as of December 31, 2008 and 2007
Consolidated Statements of Cash Flows for the years ended
December 31, 2008, 2007 and 2006
Consolidated Statements of Stockholders Equity (Deficit)
for the years ended December 31, 2008, 2007 and 2006
Notes to Consolidated Financial Statements
Exhibit
2
.1
Agreement and Plan of Merger, dated May 19, 2005, by and
among US Airways Group and America West Holdings Corporation
(incorporated by reference to Exhibit 2.1 to US Airways
Groups Registration Statement on
Form S-4
filed on June 28, 2005) (Pursuant to item 601(b)(2) of
Regulation S-K
promulgated by the SEC, the exhibits and schedules to the
Agreement and Plan of Merger have been omitted. Such exhibits
and schedules are described in the Agreement and Plan of Merger.
US Airways Group hereby agrees to furnish to the SEC, upon its
request, any or all of such omitted exhibits or schedules)
(Registration
No. 333-126162).
2
.2
Letter Agreement, dated July 7, 2005 by and among US
Airways Group, America West Holdings Corporation, Barbell
Acquisition Corp., ACE Aviation America West Holdings, Inc.,
Eastshore Aviation, LLC, Par Investment Partners, L.P.,
Peninsula Investment Partners, L.P. and Wellington Management
Company, LLP (incorporated by reference to Exhibit 2.2 to
Amendment No. 1 to US Airways Groups Registration
Statement on
Form S-4
filed on August 8, 2005) (Registration
No. 333-126162).
2
.3
Joint Plan of Reorganization of US Airways, Inc. and Its
Affiliated Debtors and
Debtors-in-Possession
(incorporated by reference to Exhibit 2.1 to US Airways
Groups Current Report on
Form 8-K
filed on September 22, 2005).
170
Table of Contents
Exhibit
2
.4
Findings of Fact, Conclusions of Law and Order Under 11 USC
Sections 1129(a) and(b) of Fed. R. Bankr. P. 3020
Confirming the Joint Plan of Reorganization of US Airways, Inc.
and Its Affiliated Debtors and
Debtors-in-Possession
(incorporated by reference to Exhibit 2.2 to US Airways
Groups Current Report on
Form 8-K
filed on September 22, 2005).
3
.1
Amended and Restated Certificate of Incorporation of US Airways
Group, effective as of September 27, 2005 (incorporated by
reference to Exhibit 3.1 to US Airways Groups Current
Report on
Form 8-K
filed on October 3, 2005).
3
.2
Amended and Restated Bylaws of US Airways Group, effective as of
September 27, 2005 (incorporated by reference to
Exhibit 3.1 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2007).
3
.3
Amended and Restated Certificate of Incorporation of US Airways,
effective as of March 31, 2003 (incorporated by reference
to Plan
Exhibit C-2
to the First Amended Joint Plan of Reorganization of US Airways
Group and Its Affiliated Debtors and
Debtors-in-Possession,
As Modified (incorporated by reference to Exhibit 2.1 to US
Airways Current Report on
Form 8-K
dated March 18, 2003).
3
.4
Amended and Restated By-Laws of US Airways, effective as of
March 31, 2003 (incorporated by reference to
Exhibit 3.1 to US Airways Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2003).
4
.1
Indenture, dated as of September 30, 2005, between US
Airways Group, the guarantors listed therein and U.S. Bank
National Association, as trustee (incorporated by reference to
Exhibit 4.1 to US Airways Groups Current Report on
Form 8-K
filed on October 3, 2005).
4
.2
Registration Rights Agreement, dated as of September 30,
2005, between US Airways Group, AWA and US Airways, as
guarantors, and the initial purchaser named therein
(incorporated by reference to Exhibit 4.2 to US Airways
Groups Current Report on
Form 8-K
filed on October 3, 2005).
10
.1
Master Memorandum of Understanding, dated as of
November 24, 2004, among US Airways Group, US Airways,
and General Electric Capital Corporation acting through its
agent GE Capital Aviation Services, Inc. and General Electric
Company, GE Transportation Component (incorporated by reference
to Exhibit 10.9 to US Airways Groups Annual Report on
Form 10-K/A
for the year ended December 31, 2004).*
10
.2
Master Merger Memorandum of Understanding, dated as of
June 13, 2005, among US Airways, US Airways Group,
America West Holdings, Inc., AWA, General Electric Capital
Corporation, acting through its agent GE Commercial Aviation
Services LLC, GE Engine Services, Inc., GE Engine
Services Dallas, LP and General Electric Company, GE
Transportation Component (incorporated by reference to
Exhibit 10.9 to US Airways Groups Quarterly Report on
Form 10-Q/A
for the quarter ended June 30, 2005).*
10
.3
Amended and Restated Airbus A320 Agreement dated as of
October 2, 2007 between US Airways, Inc. and Airbus S.A.S.
(incorporated by reference to Exhibit 10.3 to US Airways
Groups Annual Report on
Form 10-K
for the year ended December 31, 2007).*
10
.4
Amendment No. 1 dated as of January 11, 2008 to the
Amended and Restated Airbus A320 Family Aircraft Purchase
Agreement dated as of October 2, 2007 between US Airways,
Inc. and Airbus S.A.S. (incorporated by reference to
Exhibit 10.1 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2008).*
10
.5
Amendment No. 2 dated as of October 20, 2008 to the
Amended and Restated Airbus A320 Family Aircraft Purchase
Agreement dated as of October 2, 2007 between US Airways,
Inc. and Airbus S.A.S., including Amended and Restated Letter
Agreement No. 3, Amended and Restated Letter Agreement
No. 5, and Amended and Restated Letter Agreement No. 9
to the Purchase Agreement.*
10
.6
A330 Purchase Agreement dated as of October 2, 2007 between
US Airways, Inc. and Airbus S.A.S. (incorporated by reference to
Exhibit 10.4 to US Airways Groups Annual Report on
Form 10-K
for the year ended December 31, 2007).*
10
.7
Amendment No. 1 dated as of November 15, 2007 to A330
Purchase Agreement dated as of October 2, 2007 between US
Airways, Inc. and Airbus S.A.S. (incorporated by reference to
Exhibit 10.5 to US Airways Groups Annual Report
on
Form 10-K
for the year ended December 31, 2007).*
Table of Contents
Exhibit
10
.8
Amendment No. 2 dated as of October 20, 2008 to A330
Purchase Agreement dated as of October 2, 2007 between US
Airways, Inc. and Airbus S.A.S., including Amended and Restated
Letter Agreement No. 5 and Amended and Restated Letter
Agreement No. 9 to the Purchase Agreement.*
10
.9
A330/A340 Purchase Agreement dated as of November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.5 to US Airways Groups Annual
Report on
Form 10-K
for the year ended December 31, 1998).*
10
.10
Amendment No. 1 dated as of March 23, 2000 to
A330/A340 Purchase Agreement dated November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.2 to US Airways Groups
Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2000).*
10
.11
Amendment No. 2 dated as of June 29, 2000 to A330/A340
Purchase Agreement dated November 24, 1998 between US
Airways Group and AVSA, S.A.R.L. (incorporated by reference to
Exhibit 10.2 to US Airways Groups Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2000).*
10
.12
Amendment No. 3 dated as of November 27, 2000 to
A330/A340 Purchase Agreement dated November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.14 to US Airways Groups
Annual Report on
Form 10-K
for the year ended December 31, 2000).*
10
.13
Amendment No. 4 dated as of September 20, 2001 to
A330/A340 Purchase Agreement dated November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.16 to US Airways Groups
Annual Report on
Form 10-K
for the year ended December 31, 2001).*
10
.14
Amendment No. 5 dated as of July 17, 2002 to A330/A340
Purchase Agreement dated November 24, 1998 between US
Airways Group and AVSA, S.A.R.L. (incorporated by reference to
Exhibit 10.2 to US Airways Groups Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2002).*
10
.15
Amendment No. 6 dated as of March 29, 2003 to
A330/A340 Purchase Agreement dated November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.2 to US Airways Groups
Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2003).*
10
.16
Amendment No. 7 dated August 30, 2004 to the Airbus
A330/A340 Purchase Agreement dated November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.3 to US Airways Groups
Quarterly Report on
Form 10-Q/A
for the quarter ended September 30, 2004).*
10
.17
Amendment No. 8 dated December 22, 2004 to the Airbus
A330/A340 Purchase Agreement dated as of November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.6 to US Airways Groups
Quarterly Report on
Form 10-Q/A
for the quarter ended March 31, 2005).*
10
.18
Amendment No. 9 dated January 2005 to the Airbus A330/A340
Purchase Agreement dated November 24, 1998 between US
Airways Group and AVSA, S.A.R.L. (incorporated by reference to
Exhibit 10.7 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2005).*
10
.19
Letter Agreement dated December 17, 2004 between US Airways
Group and US Airways and Airbus North America Sales Inc.
(incorporated by reference to Exhibit 99.1 to US Airways
Groups Current Report on
Form 8-K
filed on February 9, 2005).
10
.20
Amendment No. 10 dated September 2005 to the Airbus
A330/A340 Purchase Agreement dated November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.7 to US Airways Groups
Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2005).*
10
.21
Amendment No. 11 dated as of October 2, 2007 to the
Airbus A330/A340 Purchase Agreement dated November 24, 1998
between US Airways Group and AVSA, S.A.R.L. (incorporated by
reference to Exhibit 10.18 to US Airways Groups
Annual Report on
Form 10-K
for the year ended December 31, 2007).*
Table of Contents
Exhibit
10
.22
Amended and Restated Airbus A350 XWB Purchase Agreement, dated
as of October 2, 2007, among AVSA, S.A.R.L. and US Airways,
Inc., AWA and US Airways Group (incorporated by reference to
Exhibit 10.19 to US Airways Groups Annual Report on
Form 10-K
for the year ended December 31, 2007).*
10
.23
Amendment No. 1 dated as of October 20, 2008 to the
Amended and Restated Airbus A350 XWB Purchase Agreement, dated
as of October 2, 2007, between US Airways, Inc. and Airbus
S.A.S., including Amended and Restated Letter Agreement
No. 3, Amended and Restated Letter Agreement No. 5,
and Amended and Restated Letter Agreement No. 9 to the
Purchase Agreement.*
10
.24
Amended and Restated Embraer Aircraft Purchase Agreement dated
as of June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.3 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2006).*
10
.25
Amendment No. 1 dated as of June 1, 2007 to Amended
and Restated Embraer Aircraft Purchase Agreement dated
June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.1 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2007).*
10
.26
Amendment No. 2 dated as of June 6, 2007 to Amended
and Restated Embraer Aircraft Purchase Agreement dated
June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.2 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2007).*
10
.27
Amendment No. 3 dated as of August 15, 2007 to Amended
and Restated Embraer Aircraft Purchase Agreement dated as of
June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.2 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2007).*
10
.28
Amendment No. 4 dated as of March 14, 2008 to Amended
and Restated Embraer Aircraft Purchase Agreement dated as of
June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.2 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2008).*
10
.29
Amendment No. 5 dated as of June 30, 2008 to Amended
and Restated Embraer Aircraft Purchase Agreement dated as of
June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.3 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2008).*
10
.30
Amendment No. 6 dated as of October 22, 2008 to
Amended and Restated Embraer Aircraft Purchase Agreement dated
as of June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.*
10
.31
Amendment No. 1 dated as of August 15, 2007 to Amended
and Restated Letter Agreement DCT-022/33 dated as of
June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.3 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2007).*
10
.32
Amendment No. 2 dated as of March 14, 2008 to Amended
and Restated Letter Agreement DCT-022/33 dated as of
June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.
(incorporated by reference to Exhibit 10.3 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2008).*
10
.33
Bombardier CRJ Aircraft Master Purchase Agreement dated as of
May 9, 2003 between US Airways Group and Bombardier, Inc.
(incorporated by reference to Exhibit 10.2 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2003).*
10
.34
Contract Change Order 1 dated January 27, 2004 to
Bombardier CRJ Aircraft Master Purchase Agreement dated as of
May 9, 2003 between US Airways Group and Bombardier, Inc.
(incorporated by reference to Exhibit 10.6 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2004).*
Table of Contents
Exhibit
10
.35
Contract Change Order 2 dated February 9, 2004 to
Bombardier CRJ Aircraft Master Purchase Agreement dated as of
May 9, 2003 between US Airways Group and Bombardier, Inc.
(incorporated by reference to Exhibit 10.7 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2004).*
10
.36
Contract Change Order 3 dated February 26, 2004 to
Bombardier CRJ Aircraft Master Purchase Agreement dated as of
May 9, 2003 between US Airways Group and Bombardier, Inc.
(incorporated by reference to Exhibit 10.8 to US Airways
Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2004).*
10
.37
Global Settlement Letter, dated November 10, 2006, among US
Airways Group and Bombardier Inc. (incorporated by reference to
Exhibit 10.46 to US Airways Groups Annual Report on
Form 10-K
for the year ended December 31, 2006).*
10
.38
Letter Agreement dated September 16, 2005 by and among US
Airways Group, America West Holdings Corporation, Barbell
Acquisition Corp., ACE Aviation America West Holdings, Inc.,
Eastshore Aviation, LLC, Par Investment Partners, L.P.,
Peninsula Investment Partners, L.P. and Wellington Management
Company, LLP (incorporated by reference to Exhibit 10.11 to
US Airways Groups Quarterly Report on Form
10-Q
for the
quarter ended September 30, 2005).
10
.39
Merchant Services Bankcard Agreement, dated as of April 16,
2003, between AWA, The Leisure Company, JPMorgan Chase Bank, and
Chase Merchant Services L.L.C. (incorporated by reference to
Exhibit 10.113 to Amendment No. 2 to the Registration
Statement on
Form S-4
filed by US Airways Group on August 11, 2005) (Registration
No. 333-126162).*
10
.40
First Amendment to Merchant Services Bankcard Agreement, dated
as of August 8, 2005, among AWA, JPMorgan Chase Bank, N.A.,
and Chase Merchant Services, L.L.C. (incorporated by reference
to Exhibit 10.111 to Amendment No. 2 to the
Registration Statement on
Form S-4
filed by US Airways Group on August 11, 2005) (Registration
No. 333-126162).*
10
.41
Second Amendment to Merchant Services Bankcard Agreement, dated
as of April 11, 2008, between US Airways Group, US
Airways, Chase Alliance Partners, LLC, as successor to Chase
Merchant Services, LLC, and JPMorgan Chase Bank, N.A.
(incorporated by reference to Exhibit 10.2 to
US Airways Groups Quarterly Report on Form
10-Q
for the
quarter ended June 30, 2008).*
10
.42
America West Co-Branded Card Agreement, dated as of
January 25, 2005, between AWA and Juniper Bank
(incorporated by reference to Exhibit 10.112 to Amendment
No. 2 to the Registration Statement on
Form S-4
filed by US Airways Group on August 11, 2005) (Registration
No. 333-126162).*
10
.43
Assignment and First Amendment to America West Co-Branded Card
Agreement, dated as of August 8, 2005, between AWA, US
Airways Group and Juniper Bank (incorporated by reference to
Exhibit 10.110 to Amendment No. 2 to the Registration
Statement on
Form S-4
filed by US Airways Group on August 11, 2005) (Registration
No. 333-126162).*
10
.44
Amendment No. 2 to America West Co-Branded Credit Card
Agreement, dated as of September 26, 2005, between AWA, US
Airways Group and Juniper Bank (incorporated by reference to
Exhibit 10.45 to US Airways Groups Annual Report
on
Form 10-K
for the year ended December 31, 2007).*
10
.45
Amendment No. 3 to America West Co-Branded Credit Card
Agreement, dated as of December 29, 2006, between US
Airways Group and Barclays Bank Delaware (incorporated by
reference to Exhibit 10.46 to US Airways Groups
Annual Report on
Form 10-K
for the year ended December 31, 2007).*
10
.46
Amendment No. 4 to America West Co-Branded Credit Card
Agreement, dated as of December 5, 2007, between US Airways
Group and Barclays Bank Delaware (incorporated by reference to
Exhibit 10.47 to US Airways Groups Annual Report on
Form 10-K
for the year ended December 31, 2007).*
10
.47
Amendment No. 5 to America West Co-Branded Credit Card
Agreement, dated as of August 28, 2008, between US Airways
Group and Barclays Bank Delaware (incorporated by reference to
Exhibit 10.4 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008).*
10
.48
Amendment No. 6 to America West Co-Branded Credit Card
Agreement, dated as of October 17, 2008, between US Airways
Group and Barclays Bank Delaware.*
10
.49
Loan Agreement [Spare Parts], dated as of October 20, 2008,
among US Airways, Inc., GECC, as administrative agent,
collateral agent and original lender, and the lenders from time
to time party thereto.*
Table of Contents
Exhibit
10
.50
Amendment No. 1 to Loan Agreement [Spare Parts], dated as
of December 5, 2008, among US Airways, Inc., GECC, as
administrative agent, collateral agent and original lender, and
the lenders from time to time party thereto.*
10
.51
Loan Agreement, dated March 23, 2007, among US Airways
Group as Borrower, certain subsidiaries of US Airways Group
party to the agreement from time to time, Citicorp North
America, Inc., as Administrative Agent, the lenders party to the
agreement from time to time, Citigroup Global Markets Inc., as
Joint Lead Arranger and Bookrunner, Morgan Stanley Senior
Funding, Inc., as Joint Lead Arranger and Bookrunner and
Syndication Agent, and General Electric Capital Corporation, as
Documentation Agent (incorporated by reference to
Exhibit 4.1 to US Airways Groups Current Report on
Form 8-K
filed on March 26, 2007).
10
.52
Amendment No. 2 to Loan Agreement, dated as of
January 14, 2008, between US Airways Group, Inc., as
Borrower, and Citicorp North America, Inc., as Administrative
Agent and Collateral Agent (incorporated by reference to
Exhibit 10.3 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended September 30, 2008).
10
.53
Amendment No. 3 to Loan Agreement, dated as of
October 20, 2008, between US Airways Group, Inc., as
Borrower, and Citigroup North America, Inc. as Administrative
Agent and Collateral Agent.
10
.54
Amended and Restated Loan Agreement, dated as of April 7,
2006, among US Airways Group, General Electric Capital
Corporation, as Administrative Agent, the lenders party to the
agreement from time to time, and certain subsidiaries of US
Airways Group party to the agreement from time to time
(incorporated by reference to Exhibit 4.1 to US Airways
Groups Current Report on
Form 8-K
dated April 7, 2006, filed on April 10, 2006).
10
.55
Stockholders Agreement, dated as of September 27,
2005, among US Airways Group and ACE Aviation America West
Holdings Inc. (incorporated by reference to Exhibit 10.1 to
US Airways Groups Current Report on
Form 8-K
filed on October 3, 2005).
10
.56
Stockholders Agreement, dated as of September 27,
2005, among US Airways Group and Eastshore Aviation LLC
(incorporated by reference to Exhibit 10.2 to US Airways
Groups Current Report on
Form 8-K
filed on October 3, 2005).
10
.57
Stockholders Agreement, dated as of September 27,
2005, among US Airways Group and Par Investment Partners, L.P.
(incorporated by reference to Exhibit 10.3 to US Airways
Groups Current Report on
Form 8-K
filed on October 3, 2005).
10
.58
Stockholders Agreement, dated as of September 27,
2005, among US Airways Group and Peninsula Investment Partners,
L.P. (incorporated by reference to Exhibit 10.4 to US
Airways Groups Current Report on
Form 8-K
filed on October 3, 2005).
10
.59
Stockholders Agreement, dated as of September 27,
2005, among US Airways Group and the group of investors named
therein under the management of Wellington Management Company,
LLP (incorporated by reference to Exhibit 10.5 to US
Airways Groups Current Report on
Form 8-K
filed on October 3, 2005).
10
.60
Stockholders Agreement, dated as of September 27,
2005, among US Airways Group, Tudor Proprietary Trading L.L.C.
and the group of investors named therein for which Tudor
Investment Corp. acts as investment advisor (incorporated by
reference to Exhibit 10.6 to US Airways Groups
Current Report on
Form 8-K
filed on October 3, 2005).
10
.61
US Airways Funded Executive Defined Contribution Plan
(incorporated by reference to Exhibit 10.1 to US
Airways Annual Report on
Form 10-K
for the year ended December 31, 2003).
10
.62
First Amendment to the US Airways Funded Executive Defined
Contribution Plan dated January 26, 2004 (incorporated by
reference to Exhibit 10.4 to US Airways Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2004).
10
.63
Second Amendment to the US Airways Funded Executive Defined
Contribution Plan dated May 20, 2004 (incorporated by
reference to Exhibit 10.5 to US Airways Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2004).
Table of Contents
Exhibit
10
.64
Third Amendment to the US Airways Funded Executive Defined
Contribution Plan dated June 24, 2004 (incorporated by
reference to Exhibit 10.6 to US Airways Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2004).
10
.65
US Airways Unfunded Executive Defined Contribution Plan
(incorporated by reference to Exhibit 10.2 to US
Airways Annual Report on
Form 10-K
for the year ended December 31, 2003).
10
.66
First Amendment to the US Airways Unfunded Executive Defined
Contribution Plan dated January 26, 2004 (incorporated by
reference to Exhibit 10.7 to US Airways Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2004).
10
.67
Second Amendment to the US Airways Unfunded Executive Defined
Contribution Plan dated May 20, 2004 (incorporated by
reference to Exhibit 10.8 to US Airways Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2004).
10
.68
Third Amendment to the US Airways Unfunded Executive Defined
Contribution Plan dated June 24, 2004 (incorporated by
reference to Exhibit 10.9 to US Airways Quarterly
Report on
Form 10-Q
for the quarter ended June 30, 2004).
10
.69
US Airways Group 2005 Equity Incentive Plan (incorporated by
reference to Exhibit 10.1 to US Airways Groups
Current Report on
Form 8-K
filed on October 3, 2005).
10
.70
Stock Unit Award Agreement, dated as of September 27, 2005,
between US Airways Group and W. Douglas Parker (incorporated by
reference to Exhibit 10.6 to US Airways Groups
Current Report on
Form 8-K
filed on October 3, 2005).
10
.71
Form of Stock Unit Agreement under US Airways Groups 2005
Equity Incentive Plan (incorporated by reference to
Exhibit 10.2 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2007).
10
.72
Form of Stock Appreciation Rights Award Agreement under US
Airways Groups 2005 Equity Incentive Plan (incorporated by
reference to Exhibit 10.75 to US Airways Groups
Annual Report on
Form 10-K
for the year ended December 31, 2005).
10
.73
Form of Nonstatutory Stock Option Award Agreement under US
Airways Groups 2005 Equity Incentive Plan (incorporated by
reference to Exhibit 10.5 to US Airways Groups
Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2006).
10
.74
Form of Stock Bonus Award Agreement for Non-Employee Directors
under US Airways Groups 2005 Equity Incentive Plan
(incorporated by reference to Exhibit 10.96 to US Airways
Groups Annual Report on
Form 10-K
for the year ended December 31, 2007).
10
.75
US Airways Group, Inc. 2008 Equity Incentive Plan (incorporated
by reference to Exhibit 4.1 to US Airways Groups
Registration Statement on
Form S-8
filed on June 30, 2008 (Registration
No. 333-152033)).
10
.76
Form of Restricted Stock Unit Award Agreement under the US
Airways Group, Inc. 2008 Equity Incentive Plan (incorporated by
reference to Exhibit 10.1 to US Airways Groups
Current Report on
Form 8-K
filed August 7, 2008).
10
.77
Form of Stock Appreciation Right Award Agreement under the US
Airways Group, Inc. 2008 Equity Incentive Plan (incorporated by
reference to Exhibit 10.2 to US Airways Groups
Current Report on
Form 8-K
filed August 7, 2008).
10
.78
Form of Director Vested Share Award Agreement under the US
Airways Group 2008 Equity Incentive Plan.
10
.79
Form of Indemnity Agreement (incorporated by reference to
Exhibit 10.1 to US Airways Groups Current Report on
Form 8-K
filed on October 6, 2005).
10
.80
Performance-Based Award Plan (as Amended and Restated effective
November 2, 2005) (incorporated by reference to
Exhibit 10.79 to US Airways Groups Annual Report on
Form 10-K
for the year ended December 31, 2005).
10
.81
Amended and Restated America West 1994 Incentive Equity Plan
(incorporated by reference to Exhibit 10.21 to AWAs
Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2001).
Table of Contents
Exhibit
10
.82
America West Holdings 2002 Incentive Equity Plan as amended
through May 23, 2002 (incorporated by reference to
Exhibit 10.1 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2006).
10
.83
2007 Performance-Based Award Program under the US Airways Group
2005 Equity Incentive Plan (incorporated by reference to
Exhibit 10.2 to US Airways Groups Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2007).
10
.84
2008 Long Term Incentive Program under the US Airways Group 2005
Equity Incentive Plan.
10
.85
Form of Executive Change in Control Agreement for Presidents
(incorporated by reference to Exhibit 10.2 to US Airways
Groups Current Report on
Form 8-K
filed on November 29, 2007).
10
.86
Form of Executive Change in Control Agreement for Executive Vice
Presidents (incorporated by reference to Exhibit 10.3 to US
Airways Groups Current Report on
Form 8-K
filed on November 29, 2007).
10
.87
Form of Executive Change in Control Agreement for Senior Vice
Presidents (incorporated by reference to Exhibit 10.4 to US
Airways Groups Current Report on
Form 8-K
filed on November 29, 2007).
10
.88
Summary of Director Compensation and Benefits.
10
.89
Form of Letter Agreement for Directors Travel Program
(incorporated by reference to Exhibit 10.106 to US Airways
Groups Annual Report on
Form 10-K
for the year ended December 31, 2007).
10
.90
Amended and Restated Employment Agreement dated as of
November 28, 2007 by and among US Airways Group, US
Airways, Inc. and W. Douglas Parker (incorporated by reference
to Exhibit 10.1 to US Airways Groups Current Report
on
Form 8-K
filed on November 29, 2007).
10
.91
Annual Incentive Bonus Plan (incorporated by reference to
Exhibit 10.1 to America West Holdings and America
West Airlines, Inc.s Quarterly Report on
form 10-Q
for the quarter ending March 31, 2005).
10
.92
US Airways Group Incentive Compensation Plan (incorporated by
reference to Exhibit 10.1 to US Airways Groups
Current Report on
Form 8-K
filed on January 23, 2006).
21
.1
Subsidiaries of US Airways Group.
23
.1
Consents of KPMG LLP, Independent Registered Public Accounting
Firm of US Airways Group.
24
.1
Powers of Attorney.
31
.1
Certification of US Airways Groups Chief Executive Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
31
.2
Certification of US Airways Groups Chief Financial Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
31
.3
Certification of US Airways Chief Executive Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
31
.4
Certification of US Airways Chief Financial Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
32
.1
Certification of US Airways Groups Chief Executive Officer
and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32
.2
Certification of US Airways Chief Executive Officer and
Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
*
Portions of this exhibit have been omitted under a request for
confidential treatment and filed separately with the United
States Securities and Exchange Commission.
Management contract or compensatory plan or arrangement.
Table of Contents
By:
By:
178
Table of Contents
Chairman and Chief Executive Officer (Principal Executive
Officer)
February 17, 2009
Executive Vice President and Chief Financial Officer (Principal
Financial and Accounting Officer)
February 17, 2009
Director
February 17, 2009
Director
February 17, 2009
Director
February 17, 2009
Director
February 17, 2009
Director
February 17, 2009
Director
February 17, 2009
Director
February 17, 2009
Director
February 17, 2009
*By:
179
Table of Contents
Exhibit
10
.5
Amendment No. 2 dated as of October 20, 2008 to the
Amended and Restated Airbus A320 Family Aircraft Purchase
Agreement dated as of October 2, 2007 between US Airways,
Inc. and Airbus S.A.S., including Amended and Restated Letter
Agreement No. 3, Amended and Restated Letter Agreement
No. 5, and Amended and Restated Letter Agreement No. 9
to the Purchase Agreement.*
10
.8
Amendment No. 2 dated as of October 20, 2008 to A330
Purchase Agreement dated as of October 2, 2007 between US
Airways, Inc. and Airbus S.A.S., including Amended and Restated
Letter Agreement No. 5 and Amended and Restated Letter
Agreement No. 9 to the Purchase Agreement.*
10
.23
Amendment No. 1 dated as of October 20, 2008 to the
Amended and Restated Airbus A350 XWB Purchase Agreement, dated
as of October 2, 2007, between US Airways, Inc. and Airbus
S.A.S., including Amended and Restated Letter Agreement
No. 3, Amended and Restated Letter Agreement No. 5,
and Amended and Restated Letter Agreement No. 9 to the
Purchase Agreement.*
10
.30
Amendment No. 6 dated as of October 22, 2008 to
Amended and Restated Embraer Aircraft Purchase Agreement dated
as of June 13, 2006 between US Airways Group and
Embraer Empresa Brasileira de Aeronautica S.A.*
10
.48
Amendment No. 6 to America West Co-Branded Credit Card
Agreement, dated as of October 17, 2008, between US Airways
Group and Barclays Bank Delaware.*
10
.49
Loan Agreement [Spare Parts], dated as of October 20, 2008,
among US Airways, Inc., GECC, as administrative agent,
collateral agent and original lender, and the lenders from time
to time party thereto.*
10
.50
Amendment No. 1 to Loan Agreement [Spare Parts], dated as
of December 5, 2008, among US Airways, Inc., GECC, as
administrative agent, collateral agent and original lender, and
the lenders from time to time party thereto.*
10
.53
Amendment No. 3 to Loan Agreement, dated as of
October 20, 2008, between US Airways Group, Inc., as
Borrower, and Citigroup North America, Inc. as Administrative
Agent and Collateral Agent.
10
.78
Form of Director Vested Share Award Agreement under the US
Airways Group 2008 Equity Incentive Plan.
10
.84
2008 Long Term Incentive Program under the US Airways Group 2005
Equity Incentive Plan.
10
.88
Summary of Director Compensation and Benefits.
21
.1
Subsidiaries of US Airways Group.
23
.1
Consents of KPMG LLP, Independent Registered Public Accounting
Firm of US Airways Group.
24
.1
Powers of Attorney.
31
.1
Certification of US Airways Groups Chief Executive Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
31
.2
Certification of US Airways Groups Chief Financial Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
31
.3
Certification of US Airways Chief Executive Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
31
.4
Certification of US Airways Chief Financial Officer
pursuant to
Rule 13a-14(a)
under the Securities Exchange Act of 1934, as amended.
32
.1
Certification of US Airways Groups Chief Executive Officer
and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32
.2
Certification of US Airways Chief Executive Officer and
Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
*
Portions of this exhibit have been omitted under a request for
confidential treatment and filed separately with the United
States Securities and Exchange Commission.
Management contract or compensatory plan or arrangement.
180
** | Confidential Treatment Requested. |
USA Amendment No. 2 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | ||
081020-CT0803167-AMD2-USA-A320 | PRIVILEGED AND CONFIDENTIAL |
Page 1 of 6
1. | MISCELLANEOUS | |
1.1 | In Clause 16.7.2(ii) of the Agreement, the words Clause 16.10.1 are deleted and replaced with the following quoted text: | |
QUOTE | ||
Clause 16.7.1 | ||
UNQUOTE | ||
1.2 | In Notes section of each, Appendix 1A, Appendix 1B and Appendix 1C to Letter Agreement No. 6, the words 1.5 of LA5are deleted and replaced with the following quoted text: | |
QUOTE | ||
1.5 of LA6 | ||
UNQUOTE | ||
2. | ** | |
Letter Agreement No. 3 is terminated in its entirety and replaced by the Amended and Restated Letter No. 3 attached hereto. |
** | Confidential Treatment Requested. |
USA Amendment No. 2 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | ||
081020-CT0803167-AMD2-USA-A320 | PRIVILEGED AND CONFIDENTIAL |
Page 2 of 6
22.15 | Asset Covenants | ||
22.15.1 | The Buyer shall not sell, transfer, convey, assign or otherwise dispose of any of its properties or other assets or operated Airbus aircraft to the extent any such disposition (i) materially impairs the business or operations of the Buyer, (ii) materially changes the nature of the Buyers business, (iii) constitutes a disposition of a substantial portion of the Buyers assets or (iv) constitutes a disposition of a substantial portion of the Buyers Airbus aircraft fleet in-service as of the date hereof. | ||
22.15.2 | Minimum Unrestricted Cash. The Buyer will not permit the aggregate amount of Unrestricted Cash (as hereinafter defined) to be less than required in the Citi Loan Agreement from time to time or any successor agreement or facility thereof, **. | ||
Unrestricted Cash means cash and Cash Equivalents (as hereinafter defined) of the Buyer, its parent and affiliates that (i) may be classified, in accordance with GAAP, as unrestricted on the consolidated balance sheets of the Buyers parent or (ii) may be qualified, in accordance with GAAP, as restricted on the consolidated balance sheets of the Buyers parent solely in favor of the administrative agent and any lenders |
** | Confidential Treatment Requested. |
USA Amendment No. 2 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | ||
081020-CT0803167-AMD2-USA-A320 | PRIVILEGED AND CONFIDENTIAL |
Page 3 of 6
pursuant to the Citi Loan Agreement and the related loan documents (or any amendment, replacement or refinancing thereof). | |||
Cash Equivalents means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States government or (b) issued by any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, the highest rating obtainable from either S&P or Moodys; (iii) commercial paper not issued by the Buyers parent maturing no more than one year after such date and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moodys; (iv) certificates of deposit or bankers acceptances maturing within one year after such date and issued or accepted by any Eligible Lender (as hereinafter defined) or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least adequately capitalized (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $500,000,000 (US dollars five hundred million); (v) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000 (US dollars five hundred million), and (c) has the highest rating obtainable from either S&P or Moodys; (vi) auction rate securities that have the highest rating obtainable from either S&P or Moodys and with a maximum reset date at least every 30 days and (vii) investments made pursuant to the investment portfolio guidelines from time to time adopted by the board of directors of the Buyers parent or any committee thereof. | |||
Eligible Lender means (i) so long as any loans or obligations under the Citi Loan Agreement remain outstanding, any Eligible Lender as defined in the Citi Loan Agreement and (ii) thereafter, (a) a commercial bank having total assets whose Dollar equivalent exceeds $5,000,000,000 (US dollars five billion), (b) a finance company, insurance company or any other financial institution or fund, in each case reasonably acceptable to the Seller and regularly engaged in making, purchase or investing in loans and having a net worth determined in accordance with GAAP, whose Dollar equivalent exceeds $250,000,000 (US dollars two hundred fifty million) (or, to the extent net worth is less than such amount, a finance company, insurance company, other financial institution or fund, reasonably acceptable to the Seller and the Buyer) or (c) a savings and loan association or saving bank organized under the laws of the United States or any State thereof having a net worth, determined in accordance with GAAP, whose Dollar equivalent exceeds $250,000,000 (US dollars two hundred fifty million); provided, however , that the following entities shall not be deemed to be an Eligible Lender: (a) an airline, a commercial aircraft operator, an air freight forwarder or an entity principally engaged in the business of parcel transport by air or (b) an affiliate of any entity described in clause (a) above. |
** | Confidential Treatment Requested. |
USA Amendment No. 2 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | ||
081020-CT0803167-AMD2-USA-A320 | PRIVILEGED AND CONFIDENTIAL |
Page 4 of 6
GAAP means generally accepted accounting principles in the United States, as in effect from time to time as set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of Financial Accounting Savings Board approved by a significant segment of the accounting profession in the United States. | |||
Citi Loan Agreement means the Loan Agreement, dated as of March 23, 2007, among Buyers parent, certain subsidiaries of the Buyers parent, the lenders from time to time party thereto and Citicorp North America, Inc., as administrative agent. | |||
22.15.3 | ** |
UNQUOTE | ||
9. | EFFECT OF AMENDMENT | |
9.1 | The provisions of this Amendment constitute a valid amendment to the Agreement and the Agreement will be deemed to be amended to the extent herein provided and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment. | |
9.2 | Both parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Amendment will be governed by the provisions of the Agreement, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern. | |
10. | CONFIDENTIALITY | |
This Amendment is subject to the confidentiality provisions set forth in Clause 22.7 of the Agreement. | ||
11. | COUNTERPARTS | |
This Amendment may be signed in separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument. |
** | Confidential Treatment Requested. |
USA Amendment No. 2 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | ||
081020-CT0803167-AMD2-USA-A320 | PRIVILEGED AND CONFIDENTIAL |
Page 5 of 6
US AIRWAYS, INC. | AIRBUS S.A.S. | |||||||
|
||||||||
By:
|
/s/ Thomas T. Weir
|
By: |
/s/ John J. Leahy
|
|||||
|
||||||||
Its:
|
Vice President and Treasurer | Its: |
Chief Operating Officer
Customers |
USA Amendment No. 2 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | ||
081020-CT0803167-AMD2-USA-A320 | PRIVILEGED AND CONFIDENTIAL |
** | Confidential Treatment Requested. |
USA Amended and Restated Letter Agreement No. 3 | ||
to Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA3-USA-A320 |
LA 3 - 1 of 3
13. | ASSIGNMENT | |
Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 13 will be void and of no force or effect. | ||
14. | COUNTERPARTS | |
This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. |
** | Confidential Treatment Requested. |
USA Amended and Restated Letter Agreement No. 3 | ||
to Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA3-USA-A320 |
LA 3 - 2 of 3
US AIRWAYS, INC. | AIRBUS S.A.S. | |||||||
|
||||||||
By:
|
/s/ Thomas T. Weir
|
By: |
/s/ John J. Leahy
|
|||||
Name: Thomas T. Weir | Name: John J. Leahy | |||||||
Title: Vice President and Treasurer |
Title: Chief Operating Officer
Customers |
USA Amended and Restated Letter Agreement No. 3 | ||
to Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA3-USA-A320 |
** | Confidential Treatment Requested. |
USA Amended and Restated Letter Agreement No. 5 | ||
to Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA5-USA-A320 |
LA 5 - 1 of 3
7. | ASSIGNMENT | |
Notwithstanding any other provision of this Letter Agreement or of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 7 will be void and of no force or effect. | ||
8. | COUNTERPARTS | |
This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. |
** | Confidential Treatment Requested. |
USA Amended and Restated Letter Agreement No. 5 | ||
to Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA5-USA-A320 |
US AIRWAYS, INC. | AIRBUS S.A.S. | |||||||
|
||||||||
By:
|
/s/ Thomas T. Weir
|
By: |
/s/ John J. Leahy
|
|||||
Name: Thomas T. Weir | Name: John J. Leahy | |||||||
Title: Vice President and Treasurer |
Title: Chief Operating Officer
Customers |
USA Amended and Restated Letter Agreement No. 5 | ||
to Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA5-USA-A320 |
LA 5
** | Confidential Treatment Requested. |
USA Amended and Restated Letter Agreement No. 9 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA9-USA-A320 |
LA 9 - 1 of 4
1. | INEXCUSABLE DELAY | |
Clause 11.1 or the Agreement is deleted in its entirety and replaced by the following text between the QUOTE and UNQUOTE: | ||
QUOTE: |
11 | - INEXCUSABLE DELAY |
** | Confidential Treatment Requested. |
USA Amended and Restated Letter Agreement No. 9 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA9-USA-A320 |
3. | ASSIGNMENT | |
Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Paragraph 3 will be void and of no force or effect. | ||
4. | COUNTERPARTS | |
This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one same instrument. |
** | Confidential Treatment Requested. |
USA Amended and Restated Letter Agreement No. 9 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA9-USA-A320 |
US AIRWAYS, INC. | AIRBUS S.A.S. | |||||||
|
||||||||
By:
|
/s/ Thomas T. Weir
|
By: |
/s/ John J. Leahy
|
|||||
Name: Thomas T. Weir
|
Name: John J. Leahy | |||||||
Title: Vice President and Treasurer |
Title: Chief Operating Officer
Customers |
USA Amended and Restated Letter Agreement No. 9 to | ||
Amended and Restated Airbus A320 Family Purchase Agreement | ||
Draft v3 | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA9-USA-A320 |
**Confidential Treatment Requested. | ||
USA Airbus A330 Purchase Agreement | ||
Amendment 2 Execution | CONFIDENTIAL AND PRIVILEGED | |
081020-CT0803167-AMD2-USA-A330 |
1/7
**Confidential Treatment Requested. | ||
USA Airbus A330 Purchase Agreement | ||
Amendment 2 Execution | CONFIDENTIAL AND PRIVILEGED | |
081020-CT0803167-AMD2-USA-A330 |
2/7
QUOTE |
**Confidential Treatment Requested. | ||
USA Airbus A330 Purchase Agreement | ||
Amendment 2 Execution | CONFIDENTIAL AND PRIVILEGED | |
081020-CT0803167-AMD2-USA-A330 |
3/7
22.14 | Asset Covenants | ||
22.14.1 | The Buyer shall not sell, transfer, convey, assign or otherwise dispose of any of its properties or other assets or operated Airbus aircraft to the extent any such disposition (i) materially impairs the business or operations of the Buyer, (ii) materially changes the nature of the Buyers business, (iii) constitutes a disposition of a substantial portion of the Buyers assets or (iv) constitutes a disposition of a substantial portion of the Buyers Airbus aircraft fleet in-service as of the date hereof. | ||
22.14.2 | Minimum Unrestricted Cash. The Buyer will not permit the aggregate amount of Unrestricted Cash (as hereinafter defined) to be less than required in the Citi Loan Agreement from time to time or any successor agreement or facility thereof, **. | ||
Unrestricted Cash means cash and Cash Equivalents (as hereinafter defined) of the Buyer, its parent and affiliates that (i) may be classified, in accordance with GAAP, as unrestricted on the consolidated balance sheets of the Buyers parent or (ii) may be qualified, in accordance with GAAP, as restricted on the consolidated balance sheets of the Buyers parent solely in favor of the administrative agent and any lenders pursuant to the Citi Loan Agreement and the related loan documents (or any amendment, replacement or refinancing thereof). | |||
Cash Equivalents means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States government or (b) issued by any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, the highest rating obtainable from either S&P or Moodys; (iii) commercial paper not issued by the Buyers parent maturing no more than one year after such date and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moodys; (iv) certificates of deposit or bankers acceptances maturing within one year after such date and issued or accepted by any Eligible Lender (as hereinafter defined) or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least adequately capitalized (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $500,000,000 (US dollars five hundred million); (v) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000 (US dollars five hundred million), and (c) has the highest rating obtainable from either S&P or Moodys; (vi) auction rate securities that have the highest rating obtainable from either S&P or Moodys and with a maximum reset date at least every 30 days and (vii) investments made pursuant to the investment portfolio guidelines from time to time adopted by the board of directors of the Buyers parent or any committee thereof. | |||
Eligible Lender means (i) so long as any loans or obligations under the Citi Loan Agreement remain outstanding, any Eligible Lender as defined in the Citi Loan |
**Confidential Treatment Requested. | ||
USA Airbus A330 Purchase Agreement | ||
Amendment 2 Execution | CONFIDENTIAL AND PRIVILEGED | |
081020-CT0803167-AMD2-USA-A330 |
4/7
Agreement and (ii) thereafter, (a) a commercial bank having total assets whose Dollar equivalent exceeds $5,000,000,000 (US dollars five billion), (b) a finance company, insurance company or any other financial institution or fund, in each case reasonably acceptable to the Seller and regularly engaged in making, purchase or investing in loans and having a net worth determined in accordance with GAAP, whose Dollar equivalent exceeds $250,000,000 (US dollars two hundred fifty million) (or, to the extent net worth is less than such amount, a finance company, insurance company, other financial institution or fund, reasonably acceptable to the Seller and the Buyer) or (c) a savings and loan association or saving bank organized under the laws of the United States or any State thereof having a net worth, determined in accordance with GAAP, whose Dollar equivalent exceeds $250,000,000 (US dollars two hundred fifty million); provided, however , that the following entities shall not be deemed to be an Eligible Lender: (a) an airline, a commercial aircraft operator, an air freight forwarder or an entity principally engaged in the business of parcel transport by air or (b) an affiliate of any entity described in clause (a) above. | ||
GAAP means generally accepted accounting principles in the United States, as in effect from time to time as set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of Financial Accounting Savings Board approved by a significant segment of the accounting profession in the United States. | ||
Citi Loan Agreement means the Loan Agreement, dated as of March 23, 2007, among Buyers parent, certain subsidiaries of the Buyers parent, the lenders from time to time party thereto and Citicorp North America, Inc., as administrative agent. |
UNQUOTE | ||
7. | EFFECT OF AMENDMENT | |
7.1 | Upon execution, Amendment will constitute a valid amendment to the Agreement and the Agreement will be deemed to be amended to the extent herein provided and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments or representations whatsoever, whether oral or written, related to the subject matter of this Amendment. | |
7.2 | Both parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement, that the provisions of the Agreement are hereby incorporated herein by reference, and that this Amendment will be governed by the provisions of the Agreement, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern. | |
8. | CONFIDENTIALITY | |
This Amendment is subject to the confidentiality provisions set forth in Clause 22.7 of the Agreement. | ||
9. | COUNTERPARTS |
**Confidential Treatment Requested. | ||
USA Airbus A330 Purchase Agreement | ||
Amendment 2 Execution | CONFIDENTIAL AND PRIVILEGED | |
081020-CT0803167-AMD2-USA-A330 |
5/7
This Amendment may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument. |
**Confidential Treatment Requested. | ||
USA Airbus A330 Purchase Agreement | ||
Amendment 2 Execution | CONFIDENTIAL AND PRIVILEGED | |
081020-CT0803167-AMD2-USA-A330 |
6/7
US AIRWAYS, INC.
|
AIRBUS S.A.S. | |
|
||
By: /s/ Thomas T. Weir
|
By: /s/ John J.
Leahy
|
|
Its: Vice President and Treasurer
|
Its: Chief Operating Officer
Customers |
**Confidential Treatment Requested. | ||
USA Airbus A330 Purchase Agreement | ||
Amendment 2 Execution | CONFIDENTIAL AND PRIVILEGED | |
081020-CT0803167-AMD2-USA-A330 |
7/7
**Confidential Treatment Requested.
USA Amended and Restated Letter Agreement No. 5 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA5-USA-A330 |
PRIVILEGED AND CONFIDENTIAL |
LA 5 - 1 of 3
**Confidential Treatment Requested.
USA Amended and Restated Letter Agreement No. 5 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA5-USA-A330 |
PRIVILEGED AND CONFIDENTIAL |
LA 5 - 2 of 3
US AIRWAYS, INC.
|
AIRBUS S.A.S. | |
|
||
By:
/s/Thomas T. Weir
|
By: /s/ John J.
Leahy
|
|
Name: Thomas T. Weir
|
Name: John J. Leahy | |
Title: Vice President and Treasurer
|
Title: Chief Operating Officer
Customers |
**Confidential Treatment Requested.
USA Amended and Restated Letter Agreement No. 5 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA5-USA-A330 |
PRIVILEGED AND CONFIDENTIAL |
LA 5
**Confidential Treatment Requested.
USA Amended and Restated Letter Agreement No. 9 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA9-USA-A330 |
PRIVILEGED AND CONFIDENTIAL |
LA 9 - 1 of 3
**Confidential Treatment Requested.
USA Amended and Restated Letter Agreement No. 9 to Airbus A330 Purchase Agreement Execution 081020-CT0803167-LA9-USA-A330 |
PRIVILEGED AND CONFIDENTIAL |
LA 9 - 2 of 3
US AIRWAYS, INC. | AIRBUS S.A.S. | |||||||
|
||||||||
By:
|
/s/ Thomas T. Weir
|
By: |
/s/ John J. Leahy
|
|||||
Name: Thomas T. Weir | Name: John J. Leahy | |||||||
Title: Vice President and Treasurer |
Title: Chief Operating Officer
Customers |
USA Airbus A330 Purchase Agreement
081020-CT0803167-LA9-USA-A330 |
PRIVILEGED AND CONFIDENTIAL |
LA 9
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
9.1.1
|
**, the Seller will have the Aircraft Ready for Delivery at the Delivery Location within the following months (each a Scheduled Delivery Month ). |
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
Year | CAC ID Number | Aircraft | Scheduled Delivery Month | |||||
2015
|
** | ** | ** | |||||
2016
|
** | ** | ** | |||||
2017
|
** | ** | ** | |||||
2018
|
** | ** | ** | |||||
TOTAL
|
22 |
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
7 .1 Letter Agreement No. 9 is terminated in its entirety and replaced by the Amended and Restated Letter No. 9 attached hereto. | ||
7.2 | In Clause 1.1.1 of Letter Agreement No. 2, the following is deleted: |
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
9.1 | The second sentence in Paragraph 1 of Letter Agreement No. 14 is deleted and replaced with the following: | |
QUOTE | ||
** | ||
UNQUOTE |
9.2 | In Paragraph 3.1 of Letter Agreement No. 14 ** is deleted and replaced with **. | |
9.3 | ** | |
9.4 | ** | |
10. | ** |
22.14 | Asset Covenants | |||
22.14.1 | The Buyer shall not sell, transfer, convey, assign or otherwise dispose of any of its properties or other assets or operated Airbus aircraft to the extent any such disposition (k) materially impairs the business or operations of the Buyer, (ii) materially changes the nature of the Buyers business, (iii) constitutes a disposition of a substantial portion of the Buyers assets or (iv) constitutes a disposition of a substantial portion of the Buyers Airbus aircraft fleet in-service as of the date hereof. | |||
22.14.2 | Minimum Unrestricted Cash. The Buyer will not permit the aggregate amount of Unrestricted Cash (as hereinafter defined) to be less than required in the Citi Loan Agreement from time to time or any successor agreement or facility thereof,**. | |||
Unrestricted Cash means cash and Cash Equivalents (as hereinafter defined) of the Buyer, its parent and affiliates that (i) may be classified, in accordance with GAAP, as unrestricted on the consolidated balance sheets of the Buyers parent or (ii) may be qualified, in accordance with GAAP, as restricted on the consolidated balance sheets of the Buyers parent solely in favor of the administrative agent and any lenders pursuant to the Citi Loan Agreement and the related loan documents (or any amendment, replacement or refinancing thereof). | ||||
Cash Equivalents means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States government or (b) issued by any agency or instrumentality of the United |
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
|
States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, the highest rating obtainable from either S&P or Moodys; (iii) commercial paper not issued by the Buyers parent maturing no more than one year after such date and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moodys; (iv) certificates of deposit or bankers acceptances maturing within one year after such date and issued or accepted by any Eligible Lender (as hereinafter defined) or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least adequately capitalized (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $500,000,000 (US dollars five hundred million); (v) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000 (US dollars five hundred million), and (c) has the highest rating obtainable from either S&P or Moodys; (vi) auction rate securities that have the highest rating obtainable from either S&P or Moodys and with a maximum reset date at least every 30 days and (vii) investments made pursuant to the investment portfolio guidelines from time to time adopted by the board of directors of the Buyers parent or any committee thereof. | |||
|
||||
|
Eligible Lender means (i) so long as any loans or obligations under the Citi Loan Agreement remain outstanding, any Eligible Lender as defined in the Citi Loan Agreement and (ii) thereafter, (a) a commercial bank having total assets whose Dollar equivalent exceeds $5,000,000,000 (US dollars five billion), (b) a finance company, insurance company or any other financial institution or fund, in each case reasonably acceptable to the Seller and regularly engaged in making, purchase or investing in loans and having a net worth determined in accordance with GAAP, whose Dollar equivalent exceeds $250,000,000 (US dollars two hundred fifty million) (or, to the extent net worth is less than such amount, a finance company, insurance company, other financial institution or fund, reasonably acceptable to the Seller and the Buyer) or (c) a savings and loan association or saving bank organized under the laws of the United States or any State thereof having a net worth, determined in accordance with GAAP, whose Dollar equivalent exceeds $250,000,000 (US dollars two hundred fifty million); provided, however , that the following entities shall not be deemed to be an Eligible Lender: (a) an airline, a commercial aircraft operator, an air freight forwarder or an entity principally engaged in the business of parcel transport by air or (b) an affiliate of any entity described in clause (a) above. |
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
|
Citi Loan Agreement means the Loan Agreement, dated as of March 23, 2007, among Buyers parent, certain subsidiaries of the Buyers parent, the lenders from time to time party thereto and Citicorp North America, Inc., as administrative agent. |
12. | EFFECT OF AMENDMENT |
12.1 | Upon execution, Amendment will constitute a valid amendment to the Agreement and the Agreement will be deemed to be amended to the extent herein provided and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments or representations whatsoever, whether oral or written, related to the subject matter of this Amendment. | |
12.2 | Both parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement, that the provisions of the Agreement are hereby incorporated herein by reference, and that this Amendment will be governed by the provisions of the Agreement, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern. |
13. | CONFIDENTIALITY | |
This Amendment is subject to the confidentiality provisions set forth in Clause 22.7 of the Agreement. |
14. | COUNTERPARTS | |
This Amendment may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument. |
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
US AIRWAYS, INC.
|
AIRBUS S.A.S. | |||
|
||||
By: /s/ Thomas T. Weir
|
By: /s/ John J. Leahy | |||
|
|
|||
Its: Vice President and Treasurer
|
Its: Chief Operating Officer
Customers |
**Confidential Treatment Requested.
|
||
USA Airbus A350 XWB Purchase Agreement
|
||
Amendment 1
|
||
Execution
|
||
081020-CT0803167-AMD1-USA-A350
|
CONFIDENTIAL AND PRIVILEGED |
Scheduled Delivery Quarter | Year | Quantity | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
**
|
** | ** | ||
Total
|
22 |
**Confidential Treatment Requested.
Amended and Restated Airbus A350 XWB Purchase Agreement Execution |
||
PRIVILEGED AND CONFIDENTIAL |
LA 12 - 15 of 15
**Confidential Treatment Requested. | ||
USA Amended and Restated Letter Agreement No. 3 to | ||
Amended and Restated Airbus A350 XWB Purchase Agreement | ||
Execution | PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA3-USA-A350 | ||
LA 3 - 1 of 3
**Confidential Treatment Requested. | ||
USA Amended and Restated Letter Agreement No. 3 to | ||
Amended and Restated Airbus A350 XWB Purchase Agreement | ||
Execution | ||
081020-CT0803167-LA3-USA-A350 | PRIVILEGED AND CONFIDENTIAL | |
LA 3 - 2 of 3
US AIRWAYS, INC. | AIRBUS S.A.S. | |||||||||
|
||||||||||
By:
|
/s/ Thomas T. Weir
|
By: |
/s/ John J. Leahy
|
|||||||
Name: Thomas T. Weir | Name: John J. Leahy | |||||||||
Title: Vice President and Treasurer |
Title: Chief Operating Officer
Customers |
**Confidential Treatment Requested.
|
||
USA Amended and Restated Letter Agreement No. 3 to
|
||
Amended and Restated Airbus A350 XWB Purchase Agreement
|
||
Execution
|
PRIVILEGED AND CONFIDENTIAL | |
081020-CT0803167-LA3-USA-A350
|
||
|
LA 3
LA 5 - 1 of 3
3. | ASSIGNMENT | |
Except as set forth in Clause 20.2 of the Agreement, this Letter Agreement and the rights and obligations of the Buyer hereunder will not be assigned or transferred in any manner without the prior written consent of the Seller, and any attempted assignment or transfer in contravention of the provisions of this Letter Agreement will be void and of no force or effect. | ||
4. | COUNTERPARTS | |
This Letter Agreement may be signed in any number of separate counterparts. Each counterpart, when signed and delivered (including counterparts delivered by facsimile transmission), will be an original, and the counterparts will together constitute one and the same instrument. |
LA 5 - 2 of 3
US AIRWAYS, INC. | AIRBUS S.A.S. | ||||||||
|
|||||||||
By:
|
/s/ Thomas T. Weir
|
By: |
/s/ John J. Leahy
|
||||||
Name:
|
Thomas T. Weir | Name: | John J. Leahy | ||||||
Title:
|
Vice President and Treasurer | Title: |
Chief Operating Officer
Customers |
LA 5
**Confidential Treatment Requested.
USA Amended and Restated Letter Agreement No. 9 to Amended and Restated Airbus A350 XWB Purchase Agreement Execution 081020-CT0803167-LA9-USA-A350 |
PRIVILEGED AND CONFIDENTIAL |
LA 9 - 1 of 3
1. | LEASED AIRCRAFT |
2. | EXCUSABLE DELAY AND TOTAL LOSS |
3. | TERMINATION | |
3.1 | ** | |
3.2 | Paragraph 21.2(1)(i) of the Agreement is amended to read as follows between the QUOTE and UNQUOTE |
3.3 | Clause 21.2 (2) (A) of the Agreement is hereby superseded and replaced by the following text between the QUOTE and UNQUOTE: |
4. | ASSIGNMENT |
5. | COUNTERPARTS |
**Confidential Treatment Requested.
USA Amended and Restated Letter Agreement No. 9 to Amended and Restated Airbus A350 XWB Purchase Agreement Execution 081020-CT0803167-LA9-USA-A350 |
PRIVILEGED AND CONFIDENTIAL |
LA 9 - 2 of 3
US AIRWAYS, INC. | AIRBUS S.A.S. | |||||||||||
|
||||||||||||
By: | /s/ Thomas T. Weir | By: | /s/ John J. Leahy | |||||||||
Name:
|
Thomas T. Weir | Name: | John J. Leahy | |||||||||
Title:
|
Vice President and Treasurer | Title: |
Chief Operating Officer
Customers |
USA Amended and Restated Letter Agreement No. 9 to
Amended and Restated Airbus A350 XWB Purchase Agreement Execution 081020-CT0803167-LA9-USA-A350 |
PRIVILEGED AND CONFIDENTIAL |
LA 9
Additional | Contractual Delivery | |||
Aircraft # | Month | Block # | ||
26**
|
** | |||
27
|
** | |||
28
|
** | ** | ||
29
|
** | |||
30
|
** | |||
31**
|
** | |||
32
|
** | |||
33
|
** | ** | ||
34
|
** | |||
35
|
** | |||
36**
|
** | |||
37
|
** | |||
38
|
** | ** |
Additional | Contractual Delivery | |||
Aircraft # | Month | Block # | ||
39
|
** | |||
40
|
** | |||
41**
|
** | |||
42
|
** | |||
43
|
** | ** | ||
44
|
** | |||
45
|
** | |||
46**
|
** | |||
47
|
** | |||
48
|
** | ** | ||
49
|
** | |||
50
|
** | |||
51**
|
** | |||
52
|
** | |||
53
|
** | ** | ||
54
|
** | |||
55
|
** | |||
56**
|
** | ** | ||
57
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** |
Option | ||
Aircraft # | Contractual Delivery Month | |
1
|
** | |
2
|
** | |
3
|
** | |
4
|
** | |
5
|
** | |
6
|
** | |
7
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** | |
8
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** | |
9
|
** | |
10
|
** | |
11
|
** | |
12
|
** | |
13
|
** | |
14
|
** |
Option | ||
Aircraft # | Contractual Delivery Month | |
15
|
** | |
16
|
** | |
17
|
** | |
18
|
** | |
19
|
** | |
20
|
** |
EMBRAER Empresa Brasileira de Aeronáutica S.A. | US Airways Group, Inc. | |||||||
|
||||||||
By:
|
/s/ Satoshi Yokota | By: | /s/ Thomas T. Weir | |||||
|
||||||||
Name:
|
Satoshi Yokota | Name: | Thomas T. Weir | |||||
Title:
|
Executive Vice President Strategic Planning and Technology Development | Title: | Vice President and Treasurer | |||||
|
||||||||
By:
Name: |
/s/ Artur Coutinho
|
Date:
Place: |
October 28, 2008
Tempe, Arizona |
|||||
Title:
|
Executive Vice President of Industrial Operations |
Witness:
|
/s/ Julieta Diederichsen
|
Witness:
|
/s/ David Lin
|
|||||||
Name: | Julieta Diederichsen | Name: | David Lin |
CONFIDENTIAL | EXECUTION COPY |
** | Confidential Treatment Requested. |
CONFIDENTIAL | EXECUTION COPY |
a. | The following definitions in Section 1 of the Agreement are deleted in their entirety and replaced with the following: |
b. | Section 1 of the Agreement is amended by adding the following definitions in the appropriate alphabetical order: |
** | Confidential Treatment Requested. |
2
CONFIDENTIAL | EXECUTION COPY |
c. | Section 4.2.2 of the Agreement is deleted in its entirety and replaced with the following: | ||
4.2.2. Fees . |
| For each **of Net New Purchase Transactions on Cards bearing US Airways Marks in which Affinity Cardholders earn **Mile per**, a fee of**; | ||
| For every **of Net New Purchase Transactions on Cards bearing US Airways Marks in which Affinity Cardholders earn **Mile per**, a fee of**; and | ||
| For each Bonus or Adjustment Mile awarded by Juniper Bank on a Card bearing US Airways Marks, a fee of**. |
| For each **of Net New Purchase Transactions on Cards bearing US Airways Marks in which Affinity Cardholders earn **Mile per**, a fee of**; | ||
| For every **of Net New Purchase Transactions on Cards bearing US Airways Marks in which Affinity Cardholders earn **Mile per**, a fee of**; and | ||
| For each Bonus or Adjustment Mile awarded by Juniper Bank on a Card bearing US Airways Marks, a fee of**. |
** | Confidential Treatment Requested. |
3
CONFIDENTIAL | EXECUTION COPY |
| For each **of Net New Purchase Transactions on Cards bearing US Airways Marks in which **cardholders earn **Mile per**, a fee of**; | ||
| For each Bonus or Adjustment Mile awarded by Juniper Bank on a Card bearing US Airways Marks, a fee of**. |
| For each **of Net New Purchase Transactions on Cards bearing US Airways Marks in which **cardholders earn **Mile per**, a fee of **.; | ||
| For each Bonus or Adjustment Mile awarded by Juniper Bank on a Card bearing US Airways Marks, a fee of**. |
| US Airways Group shall award Base Miles as set forth in Exhibit A and Exhibit B attached hereto. | ||
| US Airways Group will from time to time award Bonus Miles to Accounts. Bonus Miles will be awarded as agreed from time to time by the parties for, by way of example only and not limitation, rewards to Customers when they open Accounts, rewards to Affinity Cardholders for engaging in certain categories of transactions as the parties may agree, including, but not limited to, the use of an Account to purchase US Airways Group tickets. Bonus Miles shall be in addition to Base Miles awarded per Net New Purchase Transactions . |
d. | Section 4.6 of the Agreement is deleted in its entirety and replaced with the following: |
** | Confidential Treatment Requested. |
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CONFIDENTIAL | EXECUTION COPY |
e. | Section 4.10 of the Agreement is deleted in its entirety and replaced with the following: |
** | Confidential Treatment Requested. |
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CONFIDENTIAL | EXECUTION COPY |
f. | Section 4.12 of the Agreement is deleted in its entirety and replaced with the following: |
g. | Section 5.1 of the Agreement is amended by deleting the words Section 12 of in the first sentence. | ||
h. | Section 7 of the Agreement is amended by adding the following new Section 7.1.12: |
i. | Section 7.4 of the Agreement is amended by adding the following sentence to the end of the first paragraph: |
j. | Section 12.3 of the Agreement is deleted in its entirety and replaced with the following: |
k. | Section 14 of the Agreement is deleted in its entirety and replaced with the following: |
** | Confidential Treatment Requested. |
6
CONFIDENTIAL | EXECUTION COPY |
** | Confidential Treatment Requested. |
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CONFIDENTIAL | EXECUTION COPY |
14.3 | Subsequent Monthly Purchase . Commencing in November, 2008 for each month in which the Conditions Precedent as set forth in Section 14.3.1 are met, Juniper Bank shall purchase additional Pre-Purchased Miles in an amount equal to the difference between the Cap (as defined below) and the amount of unused Pre-Purchased Miles (each a Subsequent Purchase ). Each Subsequent Purchase shall occur no later than the ** calendar day of the month following the month in which the Conditions Precedent are measured (the Subsequent Purchase Date ). Prior to the **of the Pre-Purchase Date (the Repurchase Commencement Date ), in each month in which the Conditions Precedent are not met, the Cap shall be reduced by**. Commencing on the Repurchase Commencement Date, the Cap shall be reduced by ** each month in which the Conditions Precedent are met and ** in each month the Conditions Precedent are not met until such time no Pre-Purchased Miles remain outstanding. For purposes of this Agreement, the initial Cap shall be $200 million and will reduce accordingly as set forth above. Subsequent Purchases that occur in February shall occur on the later of February 28 or three (3) business days after receipt of the Report(s) due pursuant to Section 17. |
(i) | US Airways Groups Unrestricted Cash shall be equal to or greater than $1.5 billion as measured at the end of each month and **pre-tax income (excluding special items) measured **is less than**. For the purposes of this Section 14.3.1(i) , the calculation of Unrestricted Cash will include Collateral for fuel hedge contracts**. By way of example, if October is being measured for Novembers Subsequent Purchase, US Airways Groups Unrestricted Cash (including the fuel hedge contracts) will be measured as of October 31 st **. | ||
If US Airways Groups Unrestricted Cash falls below $1.5 billion in any monthbut the **pre-tax income test is met, then Juniper Bank will be required to purchase the additional Pre-Purchased Miles for such month**. | |||
(ii) | No Suspension Event has occurred in the month being measured. |
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CONFIDENTIAL | EXECUTION COPY |
(iii) | No Early Payment Event has occurred in the month being measured. | ||
(iv) | No material change shall have occurred to the **card benefits as set forth in Exhibit E , except as permitted pursuant to such Exhibit E . | ||
(v) | No merger of US Airways Group has occurred pursuant to Section 4.9 . | ||
(vi) | US Airways Group shall have complied with the reporting requirements set forth in Section 17 for the month being measured. |
** | Confidential Treatment Requested. |
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CONFIDENTIAL | EXECUTION COPY |
l. | Section 17 of the Agreement is deleted in its entirety and replaced with the following: |
17. REPORTING |
m. | Section 28 of the Agreement is amended by replacing the number ** with **wherever it occurs. | ||
n. | The Agreement is amended by adding the following new Section 31 at the end of the Agreement: |
o. | Exhibit A of the Agreement is amended by deleting Section 2(e). | ||
p. | The Agreement is amended by adding new Exhibits E and F to the Agreement attached to this Amendment No. 6. |
** | Confidential Treatment Requested. |
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CONFIDENTIAL | EXECUTION COPY |
** | Confidential Treatment Requested. |
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CONFIDENTIAL | EXECUTION COPY |
US AIRWAYS GROUP, INC.
|
BARCLAYS BANK DELAWARE | |||
|
Formerly known as | |||
|
JUNIPER BANK | |||
|
||||
/s/ J. Scott Kirby
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/s/ Lloyd Wirshba
|
|||
Title: President
|
Title: CEO |
** | Confidential Treatment Requested. |
CONFIDENTIAL | EXECUTION COPY |
US Airways | ||||||
provided | ||||||
benefits** | Consumer cards** | Consumer cards** | Consumer cards** | |||
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CONFIDENTIAL
EXECUTION COPY
Marketing Channel
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Page | ||||
Article I The Loan
|
1 | |||
|
||||
Section 1.1. The Loan
|
1 | |||
Section 1.2. Making the Loan
|
3 | |||
Section 1.3. Fees
|
4 | |||
Section 1.4. Commitment Termination
|
4 | |||
Section 1.5. [Intentionally omitted.]
|
4 | |||
Section 1.6. [Intentionally omitted.]
|
4 | |||
Section 1.7. Special Provisions Governing the Loan
|
5 | |||
Section 1.8. Payments and Computations
|
7 | |||
Section 1.9. Sharing of Payments, Etc.
|
8 | |||
Section 1.10. Obligation of Lenders to Mitigate
|
8 | |||
|
||||
Article II Interest
|
8 | |||
|
||||
Section 2.1. Rate of Interest
|
8 | |||
Section 2.2. Interest Periods
|
9 | |||
(a) Interest Periods
|
9 | |||
(b) Expiration of Interest Periods
|
9 | |||
Section 2.3. Interest Payments
|
9 | |||
Section 2.4. Default Rate
|
9 | |||
Section 2.5. Computation of Interest
|
9 | |||
Section 2.6. Maximum Rate
|
9 | |||
|
||||
Article III Representations and Warranties
|
10 | |||
|
||||
Section 3.1. Representations and Warranties
|
10 | |||
(a) Organization; Powers
|
10 | |||
(b) Authorization; Enforceability
|
10 | |||
(c) No Violation
|
10 | |||
(d) Governmental Approvals
|
11 | |||
(e) Litigation
|
11 | |||
(f) Financial Condition
|
11 | |||
(g) No Default
|
11 | |||
(h) Investment and Holding Company Status
|
12 | |||
(i) Use of Proceeds
|
12 | |||
(j) Licenses, Permits, etc.
|
12 | |||
(k) Compliance with Laws
|
12 | |||
(l) Tax Returns
|
12 | |||
(m) Information
|
12 | |||
(n) ERISA
|
12 | |||
Section 3.2. The Pledged Spare Parts
|
13 | |||
(a) Good Title
|
13 | |||
(b) Filings
|
13 |
- i -
Page | ||||
(c) [Intentionally Omitted]
|
14 | |||
(d) Section 1110
|
14 | |||
(e) Conditions
|
14 | |||
(f) Location, Identification and Release of Pledged Spare
Parts
|
14 | |||
(g) Software
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14 | |||
(i) Spare Parts
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14 | |||
(j) Certain Matters Concerning Affiliates
|
14 | |||
Section 3.3. Representations and Warranties of the Lenders
|
15 | |||
(a) Accredited Investor
|
15 | |||
(b) Investment Intent
|
15 | |||
(c) ERISA
|
15 | |||
(d) No Offering
|
15 | |||
|
||||
Article IV Covenants
|
15 | |||
|
||||
Section 4.1. Covenants of the Borrower
|
15 | |||
(a) Financial Statements and Other Information
|
15 | |||
(b) Existence; Conduct of Business
|
17 | |||
(c) Mergers and Consolidations
|
17 | |||
(d) Delivery of Post-Recording FAA Opinion
|
18 | |||
(e) Software
|
18 | |||
(f) Compliance with Mortgage
|
18 | |||
(g) ERISA
|
19 | |||
(h) Minimum Unrestricted Cash Amount
|
19 | |||
(i) Records
|
19 | |||
(i) Operations of Affiliates
|
19 | |||
|
||||
Article V Increased Costs; General Indemnity
|
19 | |||
|
||||
Section 5.1. Increased Costs
|
19 | |||
Section 5.2. Capital Adequacy
|
19 | |||
Section 5.3. Withholding of Taxes
|
19 | |||
(a) Payments to Be Free and Clear
|
19 | |||
(b) Grossing-up of Payments
|
19 | |||
(c) Evidence of Exemption from U.S. Withholding Tax
|
19 | |||
Section 5.4. (a) Other Taxes
|
21 | |||
Section 5.4. (b) Contest of Tax Claims
|
21 | |||
(c) Non-Parties
|
21 | |||
Section 5.5. Indemnity
|
21 |
- ii -
Page | ||||
Article VI Conditions Precedent
|
22 | |||
|
||||
Section 6.1. Conditions to Effectiveness of Commitments
|
22 | |||
Section 6.2. Conditions to Funding
|
22 | |||
Section 6.3. Additional Conditions to Funding
|
27 | |||
|
||||
Article VII Events of Default
|
29 | |||
|
||||
Section 7.1. Events of Default
|
29 | |||
|
||||
Article VIII The Transaction Agents
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31 | |||
|
||||
Section 8.1. Appointment and Authorization
|
31 | |||
Section 8.2. Delegation of Duties
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31 | |||
Section 8.3. Exculpatory Provisions
|
31 | |||
Section 8.4. Reliance by Transaction Agents
|
32 | |||
Section 8.5. Notice of Events of Default
|
32 | |||
Section 8.6. Non-Reliance on Transaction Agents and Other Lenders; Lender
Representations
|
32 | |||
Section 8.7. Transaction Agents and Affiliates
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32 | |||
Section 8.8. Indemnification
|
33 | |||
Section 8.9. Successor Transaction Agents
|
33 | |||
|
||||
Article IX Miscellaneous
|
33 | |||
|
||||
Section 9.1. Amendments
|
33 | |||
Section 9.2. Notices
|
34 | |||
Section 9.3. Costs and Expenses
|
34 | |||
Section 9.4. Certain Agreements
|
34 | |||
Section 9.5. Entire Agreement
|
34 | |||
Section 9.6. Cumulative Rights and Severability
|
34 | |||
Section 9.7. Waivers
|
35 | |||
Section 9.8. Successors and Assigns; Participations; Assignments
|
35 | |||
(a) Successors and Assigns
|
35 | |||
(b) Participations
|
35 | |||
(c) Assignments
|
35 | |||
(d) Register
|
36 | |||
Section 9.9. Confidentiality
|
36 | |||
Section 9.10. Counterparts
|
37 | |||
Section 9.11. Governing Law; Submission to Jurisdiction; Venue
|
37 | |||
Section 9.12. Waiver of Trial by Jury
|
38 | |||
Section
9.13.
Effective Date
|
38 |
- iii -
Schedule 1
|
Definitions | |
Schedule 2
|
Amortization of the Loan | |
Schedule 3
|
Certain Information | |
Schedule 4
|
ERISA Plans | |
Schedule 5
|
Certain Rotables and Key Repairables |
Exhibit
A
|
Form of Mortgage | |
Exhibit
B
|
Form of Promissory Note | |
Exhibit
C
|
Form of Notice of Borrowing | |
Exhibit
D
|
Form of Opinion of Special Counsel to the Borrower for Closing | |
Exhibit
E
|
Form of Opinion of Borrowers Legal Department for Closing | |
Exhibit
F
|
Form of Transfer Supplement | |
Exhibit G
|
Form of Certificate of Non-Bank Status | |
Exhibit H
|
F orm of FAA Counsels Opinion | |
E
xhibit
I
|
Form of Subordinated Parts Mortgage | |
E
xhibit
J
|
Form of Subordinated Engine Mortgage | |
E
xhibit
K
|
Form of Subordinated Aircraft Mortgage | |
E
xhibit
L
|
Form of Omnibus Intercreditor Agreement | |
E
xhibit
M
|
Form of PK Loan Agreement Amendment | |
E
xhibit
N
|
Form of PK Mortgage Amendment | |
E
xhibit
O
|
Form of Subordinated Lease Assignment |
- iv -
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|
By: |
/s/ David L. Lloyd, Jr.
|
||||
Name: David L. Lloyd, Jr. | ||||||
Title: Vice President | ||||||
|
||||||
Address: | ||||||
General Electric Capital Corporation | ||||||
c/o GE Commercial Aviation Services LLC | ||||||
201 High Ridge Road | ||||||
Stamford, Connecticut 06927 | ||||||
|
||||||
Attention: Customer Services | ||||||
Facsimile: ** | ||||||
email: ** |
** | Confidential Treatment Requested. |
|
By: |
/s/ David L. Lloyd, Jr.
|
||||
Name: David L. Lloyd, Jr. | ||||||
Title: Vice President | ||||||
|
||||||
Address: | ||||||
General Electric Capital Corporation | ||||||
c/o GE Commercial Aviation Services LLC | ||||||
201 High Ridge Road | ||||||
Stamford, Connecticut 06927 | ||||||
|
||||||
Attention: Customer Services | ||||||
Facsimile: ** | ||||||
email: ** |
US AIRWAYS, INC. | ||||||
|
||||||
|
By: |
/s/ Thomas T. Weir
|
||||
Name: Thomas T. Weir | ||||||
Title: Vice President and Treasurer | ||||||
|
||||||
Address: | ||||||
|
||||||
US Airways, Inc. | ||||||
4000 E. Sky Harbor Blvd. | ||||||
Phoenix, Arizona 85034 | ||||||
|
||||||
Attention: Vice President and Treasurer | ||||||
Telephone: ** | ||||||
Telecopy: ** | ||||||
email: ** | ||||||
|
||||||
With a copy to: | ||||||
General Counsel | ||||||
Telecopy: ** |
GENERAL ELECTRIC CAPITAL CORPORATION
as Original Lender |
||||||
|
||||||
|
By: |
/s/ David L. Lloyd, Jr.
|
||||
Name: David L. Lloyd, Jr. | ||||||
Title: Vice President | ||||||
|
||||||
Notice Address and Lending Office: | ||||||
|
||||||
General Electric Capital Corporation | ||||||
c/o GE Commercial Aviation Services LLC | ||||||
201 High Ridge Road | ||||||
Stamford, Connecticut 06927 | ||||||
|
||||||
Attention: Customer Services | ||||||
Facsimile: ** | ||||||
email: ** | ||||||
|
||||||
Commitment: $270,000,000 |
** | Confidential Treatment Requested. |
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B | E | |||||||||||||||||||||||
A | Assumes ** | C | D | Assumes ** | F | |||||||||||||||||||
Maximum | Maximum Rotable & | Required | Maximum | Maximum Rotable & | Required | |||||||||||||||||||
Collateral | Key Repairable | Collateral | Collateral | Key Repairable | Collateral | |||||||||||||||||||
Payment Date | Ratio | Ratio | Amount | Ratio | Ratio | Amount | ||||||||||||||||||
Funding Date
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jan-09
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Apr-09
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jul-09
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Oct-09
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jan-10
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Apr-10
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jul-10
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Oct-10
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jan-11
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Apr-11
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jul-11
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Oct-11
|
* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jan-12
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Apr-12
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jul-12
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Oct-12
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jan-13
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Apr-13
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jul-13
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Oct-13
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* | * | * | * | * | * | * | * | * | * | * | * | ||||||||||||
Jan-14
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* | * | * | * | * | * | * | * | ||||||||||||||||
Apr-14
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* | * | * | * | * | * | * | * | ||||||||||||||||
Jul-14
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* | * | * | * | * | * | * | * | ||||||||||||||||
Oct-14
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* | * | * | * | * | * | * | * |
** | Confidential Treatment Requested. |
2
** | Confidential Treatment Requested. |
1
** | Confidential Treatment Requested. |
2
1
** | Confidential Treatment Requested. |
- 2 -
US AIRWAYS, INC.
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By: | ||||
Name: | ||||
Title: |
[
]
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By: | ||||
Name: | ||||
Title: | ||||
General Electric Capital Corporation
|
||
as Administrative Agent
|
||
Attention: [
]
|
, 2008 |
(1) | The Funding Date on which the Proposed Loan shall be made is . | ||
(2) | The aggregate principal amount of the Proposed Loan is $ . |
Very truly yours,
US AIRWAYS, INC. |
||||
By: | ||||
Name: | ||||
Title: | ||||
1. | Include if the Assignee is organized under the laws of a jurisdiction outside of the United States. |
- 2 -
[NAME OF ASSIGNOR],
as Assignor |
||||
By | ||||
Title: | ||||
[NAME OF ASSIGNEE],
as Assignee |
||||
By | ||||
Title: | ||||
GENERAL ELECTRIC CAPITAL CORPORATION | ||||
as Collateral Agent | ||||
|
||||
By
|
||||
|
|
|||
|
Title: |
- 3 -
1. | Borrower: US Airways, Inc. | |
2. | Name and Date of Loan Agreement: | |
Loan Agreement [Spare Parts], dated as of ___, 2008, among US Airways, Inc., as Borrower, General Electric Capital Corporation, as Administrative Agent, General Electric Capital Corporation, as Collateral Agent, General Electric Capital Corporation, as Original Lender, and the Lenders from time to time party thereto. | ||
3. | Date of Assignment Agreement: | |
4. | Amounts (as of date of Item 3 above): |
Principal Amount | Percentage | |||||||
of Outstanding Notes | Holding (Expressed as % of | |||||||
(or Commitment) | Facility) | |||||||
a.
|
Aggregate Amount for all Lenders | $ | ** | |||||
b.
|
Amount held by Assignor immediately prior to Assignment | $ | % | |||||
c.
|
Amount of Assigned Share | $ | % | |||||
d.
|
Amount Retained by Assignor | $ | % |
5. | Settlement Date: |
** | Confidential Treatment Requested. |
6. Rate of Interest to the
Assignee:
|
As set forth in Section 2.1 of the Loan Agreement (unless otherwise agreed to by the Assignor and the Assignee) * |
7. | Notice and Lending Office: | |
ASSIGNOR: |
ASSIGNEE: |
8. | Payment Instructions: | |
ASSIGNOR: |
ASSIGNEE: |
* | The Borrower and the Administrative Agent shall direct the entire amount of the interest to the Assignee at the rate set forth in Section 2.1 of the Loan Agreement, with the Assignor and Assignee effecting the agreed upon sharing of the interest through payments by the Assignee to the Assignor. |
- 2 -
9. | Other Documents or Fees for Closing (if any): |
Acknowledged and Agreed: | ||||||||
|
||||||||
[NAME OF ASSIGNEE] | [NAME OF ASSIGNOR] | |||||||
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||||||||
By
|
By | |||||||
|
|
|
||||||
|
||||||||
(Print Name and Title) | (Print Name and Title) |
- 3 -
[NAME OF LENDING INSTITUTION]
|
||||
By | ||||
Title: | ||||
Date: |
** | Confidential Treatment Requested. |
** | Confidential Treatment Requested. |
1
** | Confidential Treatment Requested. |
2
** | Confidential Treatment Requested. |
3
** | Confidential Treatment Requested. |
4
** | Confidential Treatment Requested. |
5
** | Confidential Treatment Requested. |
6
** | Confidential Treatment Requested. |
7
** | Confidential Treatment Requested. |
8
** | Confidential Treatment Requested. |
9
** | Confidential Treatment Requested. |
10
** | Confidential Treatment Requested. |
11
** | Confidential Treatment Requested. |
12
US AIRWAYS, INC.
|
||||
By: | /s/ Thomas T. Weir | |||
Name: | Thomas T. Weir | |||
Title: | Vice President and Treasurer | |||
GENERAL ELECTRIC CAPITAL CORPORATION
as the Administrative Agent, Collateral Agent and Original Lender |
||||
By: | /s/ Ricardo B. Silva | |||
Name: | Ricardo B. Silva | |||
Title: | Vice President | |||
-S-
S-1
US AIRWAYS GROUP, INC.,
as Borrower |
||||||
|
||||||
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By: | /s/ Thomas T. Weir | ||||
|
||||||
|
Name: | Thomas T. Weir | ||||
|
Title: | Vice President and Treasurer | ||||
|
||||||
US AIRWAYS, INC. | ||||||
|
||||||
|
By: | /s/ Thomas T. Weir | ||||
|
||||||
|
Name: | Thomas T. Weir | ||||
|
Title: | Vice President and Treasurer | ||||
|
||||||
AMERICA WEST AIRLINES, LLC (as successor to | ||||||
AMERICA WEST AIRLINES, INC.) | ||||||
|
||||||
|
By: | /s/ Thomas T. Weir | ||||
|
||||||
|
Name: | Thomas T. Weir | ||||
|
Title: | Vice President and Treasurer |
AMERICA WEST HOLDINGS, LLC (as successor to | ||||||
AMERICA WEST HOLDINGS CORPORATION) | ||||||
|
||||||
|
By: | /s/ Thomas T. Weir | ||||
|
||||||
|
Name: | Thomas T. Weir | ||||
|
Title: | Vice President and Treasurer | ||||
|
||||||
MATERIAL SERVICES COMPANY, INC. | ||||||
|
||||||
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By: | /s/ Caroline B. Ray | ||||
|
||||||
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Name: | Caroline B. Ray | ||||
|
Title: | Secretary | ||||
|
||||||
PSA AIRLINES, INC. | ||||||
|
||||||
|
By: | /s/ Keith Houk | ||||
|
||||||
|
Name: | Keith Houk | ||||
|
Title: | President and Chief Executive Officer | ||||
|
||||||
PIEDMONT AIRLINES, INC. | ||||||
|
||||||
|
By: | /s/ Caroline B. Ray | ||||
|
||||||
|
Name: | Caroline B. Ray | ||||
|
Title: | Secretary |
CITICORP NORTH AMERICA, INC., | ||||||
as Administrative Agent | ||||||
|
||||||
|
By: | /s/ James J. McCarthy | ||||
|
||||||
|
Name: | James J. McCarthy | ||||
|
Title: | Managing Director and Vice President |
By
Title: |
||||
(i) | the Lenders will have exclusive rights to exercise, and a block on the ability of the lenders under the second lien facility (the Junior Lienholders) to exercise lien-related rights and remedies until after the expiration of a standstill period of 180 days and thereafter so long as the Lenders have commenced the exercise of remedies; |
(ii) | the Junior Lienholders will not object to the amount, enforceability or priority of the Lenders claims or liens and will acknowledge that the Lenders senior obligations for purposes of the intercreditor agreement will include post petition interest, whether or not allowed; |
(iii) | the Junior Lienholders will not object to (or support others in objecting to) a debtor-in-possession financing or use of cash collateral; |
(iv) | the Junior Lienholders will not object to the Lenders adequate protection, nor will the Junior Lienholders seek adequate protection in the form of cash payments without the consent of the Lenders; provided that, Junior Lienholders shall be entitled to obtain replacement liens on the Collateral if the Lenders first obtain a replacement lien on such Collateral so long as the Junior Lienholders lien is subordinate to the Lenders lien on at least the same terms hereof; |
(v) | the Junior Lienholders will not object, and will be deemed to have consented to (including for purposes of Section 363(f) of the Bankruptcy Code), any sale or disposition of the Collateral under the Loan Documentation consented to by the Lenders whether in a consensual sale or disposition, upon enforcement of rights outside of bankruptcy, in any bankruptcy proceeding or otherwise, and the Junior Lienholders will be deemed to have released their liens on such assets (but shall retain their lien on the sale proceeds thereof subject to all rights of the Lenders to such proceeds); |
(vii) | the Lenders and the Junior Lienholders shall have separate grants of security and vote as separate classes on any plan of reorganization in connection with any bankruptcy proceeding; |
(viii) | the documentation with respect to the second lien facility will not be amended in certain respects without the consent of the Lenders; and |
(ix) | No provisions inconsistent with the terms of this Exhibit shall be included in any documentation related to the Junior Lienholders facilities. |
Manufacturer | Model | Serial Number | ||
General Electric | CF34-3B1 | E950494 | ||
General Electric | CF34-8C1 | E965668 |
Manufacturer | Model | Serial Number | ||||
Pratt & Whitney | PW4168A | 733466 | ||||
Pratt & Whitney | PW4168A | 733486 | ||||
Pratt & Whitney | PW4168A | 733514 | ||||
Rolls Royce | RB211-535E4 | 30549 | ||||
Rolls Royce | RB211-535E4 | 30591 | ||||
Rolls Royce | RB211-535E4 | 30921 | ||||
Rolls Royce | RB211-535E4 | 31202 | ||||
Rolls Royce | RB211-535E4 | 31411 | ||||
Rolls Royce | RB211-535E4 | 31415 | ||||
Rolls Royce | RB211-535E4 | 31416 | ||||
CFM International | CFM56-3B2 | 720235 | ||||
CFM International | CFM56-3B2 | 721196 | ||||
CFM International | CFM56-3B2 | 721222 | ||||
CFM International | CFM56-3B2 | 722445 | ||||
CFM International | CFM56-3B2 | 724636 | ||||
General Electric | CF6-80C2B2 | 695424 | ||||
General Electric | CF6-80C2B2 | 695425 | ||||
CFM International | CFM56-3B2 | 720601 | * | |||
CFM International | CFM56-3B1 | 720772 | * | |||
CFM International | CFM56-3B1 | 720867 | * | |||
CFM International | CFM56-3B2 | 721179 | * | |||
CFM International | CFM56-3B2 | 721395 | * | |||
Rolls Royce | RB211-535E4 | 30503 | * | |||
IAE | V2500-A1 | V0089 | * | |||
IAE | V2500-A1 | V0334 | * | |||
IAE | V2500-A1 | V0340 | * | |||
IAE | V2527-A5 | V10120 | * |
| Focus management efforts on the creation of long-term stockholder value. | |
| Encourage strategic decision-making by providing rewards for the long-term achievement of Company goals. |
Page 1
Officer Level | Threshold | Target | Maximum | |||
CEO | 54% | 125% | 200% | |||
President | 49% | 115% | 200% | |||
EVP | 43% | 100% | 175% | |||
SVP | 30% | 70% | 140% | |||
VP | 20% | 45% | 90% |
A) | Performance Cycles | |
A performance cycle, over which TSR is measured, is the three-year period beginning January 1 of a given year and ending December 31 of the second following year (each a Performance Cycle). The Committee, in its sole discretion, may authorize Performance Cycles, and it is anticipated, although not assured, that a three-year Performance Cycle will begin each January 1. | ||
All officers of the Company (or an Affiliate) otherwise eligible to participate in the Program will be eligible to participate in a Performance Cycle commencing January 1, 2008, and ending December 31, 2010. |
B) | Peer Group and Award Payout Percentages | |
The competitive peer group consists of the following eleven companies: AirTran Holdings, Inc., Alaska Air Group, Inc., AMR Corporation, Continental Airlines, Inc., Delta Air Lines, Inc., Frontier Airlines Holdings, Inc., Hawaiian Holdings, Inc., JetBlue Airways Corporation, Northwest Airlines Corporation, Southwest Airlines Co. and UAL Corporation. Such competitive peer group is subject to modification, in the Committees |
Page 2
sole discretion, to take account of unforeseen events such as mergers, dispositions, bankruptcies and other significant business changes. |
Payout as a % of Base Salary | ||||||||||||||||||||||||
Company TSR
Relative Rank |
VP | SVP | EVP | President | CEO | |||||||||||||||||||
1-2 of 12
|
90% | 140% | 175% | 200% | 200% | (Maximum) | ||||||||||||||||||
3 of 12
|
78.75% | 122.5% | 156.25% | 178.75% | 181.25% | |||||||||||||||||||
4 of 12
|
67.5% | 105% | 137.5% | 157.5% | 162.5% | |||||||||||||||||||
5 of 12
|
56.25% | 87.5% | 118.75% | 136.25% | 143.75% | |||||||||||||||||||
6 of 12
|
45% | 70% | 100% | 115% | 125% | (Target) | ||||||||||||||||||
7 of 12
|
32.5% | 50% | 71.5% | 82% | 89.5% | |||||||||||||||||||
8 of 12
|
20% | 30% | 43% | 49% | 54% | (Threshold) | ||||||||||||||||||
9-12 of 12
|
0 | 0% | 0% | % | 0% |
Page 3
Page 4
Page 5
2
US Airways, Inc.:
February 17, 2009
/s/ Herbert M. Baum | ||||
Herbert M. Baum | ||||
/s/ Matthew J. Hart | ||||
Matthew J. Hart | ||||
/s/ Richard C. Kraemer | ||||
Richard C. Kraemer | ||||
/s/ Cheryl G. Krongard | ||||
Cheryl G. Krongard | ||||
/s/ Bruce R. Lakefield | ||||
Bruce R. Lakefield | ||||
/s/ Denise M. OLeary | ||||
Denise M. OLeary | ||||
/s/ George M. Philip | ||||
George M. Philip | ||||
/s/ J. Steven Whisler | ||||
J. Steven Whisler | ||||
/s/ W. Douglas Parker | ||||
Name: | W. Douglas Parker | |||
Title: | Chief Executive Officer |
/s/ Derek J. Kerr | ||||
Name: | Derek J. Kerr | |||
Title: | Chief Financial Officer |
/s/ W. Douglas Parker | ||||
Name: | W. Douglas Parker | |||
Title: | Chief Executive Officer |
/s/ Derek J. Kerr | ||||
Name: | Derek J. Kerr | |||
Title: | Chief Financial Officer |
/s/ W. Douglas Parker
|
||
Title: Chief Executive Officer
|
||
Date: February 17, 2009
|
||
|
||
/s/ Derek J. Kerr
|
||
Title: Chief Financial Officer
|
||
Date: February 17, 2009
|
/s/ W. Douglas Parker
|
||
Title: Chief Executive Officer
|
||
Date: February 17, 2009
|
||
|
||
/s/ Derek J. Kerr
|
||
Title: Chief Financial Officer
|
||
Date: February 17, 2009
|